ORAL ANSWERS TO QUESTIONS

CABINET OFFICE

The Minister for the Cabinet Office was asked—

Civil Service Reform

David Taylor: What recent representations she has received on reform of the civil service.

Tessa Jowell: I have not received any specific representations on civil service reform, but this House knows that we remain committed to ensuring that the civil service is transparent and accountable and delivers the maximum value for every public pound of investment.

David Taylor: For civil service reforms to have an impact outside Whitehall, we need fuller information about the activities of senior civil servants. The delayed publication of the 2007 hospitality lists was just a start. Should we not, for example, place in the public domain permanent secretaries' diaries? Would that not help to create the sort of transparency that the public expect nowadays from unelected officials, and help to refresh the machinery of government as part of real constitutional renewal?

Tessa Jowell: I know of my hon. Friend's interest in the issue, and he will know about the commitment to transparency in publishing all details of senior civil service hospitality and expenses. He will also know that the Cabinet Secretary yesterday took the first step in publishing his own expenses, a move that was warmly welcomed by the chairman of the Committee on Standards in Public Life.

David Evennett: Does the Minister believe that it is proper that when the civil service code is drafted it should be scrutinised by Parliament as part of a Bill, rather than as secondary legislation?

Tessa Jowell: The hon. Gentleman will know that the Government are committed to placing the civil service code on a statutory basis. That forms part of the Constitutional Renewal Bill that will come before the House. As with all these things, the challenge is to find legislative time, but the important point is that the civil service has taken very substantial steps to improve and to enhance accountability without legislation, and that is to be welcomed.

Tony Wright: Should we not warmly congratulate the Cabinet Secretary on publishing his own expenses, and also those of all top senior civil servants, and is that not an example to the wider public sector?

Tessa Jowell: I entirely agree with my hon. Friend.

Francis Maude: It is a pleasure to congratulate the Paymaster General and the Minister of State on their appointments. We look forward to having many fruitful discussions both across the Dispatch Box and elsewhere.
	A report in May by PricewaterhouseCoopers found that finance directors in central Government Departments do not "have a pivotal place" at the public sector "top table" and
	"their boards have a mixed appetite for transparency in financial decisions".
	In light of the crying need for greater efficiency in the face of Britain's worsening public finances, does the Minister agree that the status and authority of such finance directors need to be raised to the same level as that which they enjoy in the private sector?

Tessa Jowell: I thank the right hon. Gentleman for his kind words, and I entirely agree with his sentiment. The value-for-money discipline that the finance director ultimately oversees needs to be a cultural discipline in Government Departments, promoted in every possible way with maximum transparency. I would also draw to his attention and underline, however, the success of the savings made by central Government through the civil service as a result of the Gershon review: £26 billion worth of savings have been made, with plans for a further £35 billion worth of savings, in order that we can continue to invest in public services as we believe the public wish.

Francis Maude: We are familiar with the numbers that the Paymaster General has just read out, but we are slightly less convinced about their relationship with the reality of efficiencies actually delivered. Will she confirm that the now much delayed Constitutional Renewal Bill will include provisions that were in the draft Civil Service Bill, which was promised for more than a decade but still has not seen the light of day in Parliament? Will the Constitutional Renewal Bill contain provisions on special advisers? Given the corrosive effect of some special advisers on the quality and integrity of government, should not the Bill place a cap on their number and reassert in law that their role is to advise Ministers and not to direct the civil service—or does the fact that Damian McBride is apparently still in contact with Ministers just go to show that a change of culture within Whitehall will not happen without a change of Government?

Tessa Jowell: If the right hon. Gentleman is going to make assertions such as the one he made in relation to Damian McBride, he needs to provide some evidence. The important step the Government have taken has been to publish—the Prime Minister has been absolutely unequivocal about this—a code for special advisers, which was very recently updated to underline with absolute clarity special advisers' responsibilities. I would just add that it is very easy to abuse special advisers as a category on the basis of the bad behaviour of a tiny minority, but in my view they greatly enhance the effective working of government, and that should be welcomed.

Business Disruption Plans

Lorely Burt: What steps her Department is taking as part of its civil contingencies responsibilities to increase the proportion of small businesses which have a business disruption plan.

Tessa Jowell: The Civil Contingencies Act 2004 places a duty on local authorities to provide business continuity advice, which ensures that advice reflects local conditions at times of emergency and meets local needs. To support that work, the Government have set up a business continuity advice line and in 2008 we published a national risk register to encourage organisations to prepare for the impact of business disruption. In addition, we are supporting the quality of that advice by the adoption of a British standard for business continuity.

Lorely Burt: In March, a Cabinet Office survey found that the proportion of small businesses that had a business continuity plan fell from 25 per cent. to only 14 per cent. The possibility of allowing a premium discount with insurers was being considered to see whether that would reverse the trend in respect of companies that had a business disruption plan. Will the Minister say whether she agrees with that strategy and how far the Cabinet Office has got with that investigation?

Tessa Jowell: It is clearly the responsibility of local authorities to pursue that policy with their small businesses and through their local organisations. However, the figures to which the hon. Lady refers rightly give cause for concern, and I am happy to write to her further about that matter.

Voluntary Sector

John Robertson: What assessment she has made of the effects of the economic downturn on the financial viability of the voluntary sector; and if she will make a statement.

Angela Smith: We recognise that there is a double challenge for the sector during the economic downturn: not only is there an increased demand for services, but there are concerns about financial viability. In response, we have devised a significant package of support for the third sector comprising up to £42.5 million of targeted supported, which is delivering real help now, when it is needed, and the £16.7 million hardship fund announced in the Budget in April. In addition, the sector will have a share in the £1.2 billion future jobs fund. That is a comprehensive package of measures. It includes support for volunteers, grants for small organisations and social enterprises, support for jobs and loans to assist partnership working.

John Robertson: I thank my right hon. Friend for her extensive answer and I welcome her to her post. Does she realise that some people, particularly those with economic problems and the charities that deal with such problems, are encountering more difficulties than others? As money is being filtered into the Olympics as well, such people are finding it very hard to make ends meet these days. What additional help can be given to those people, particularly those who are having problems balancing their house budgets?

Angela Smith: It was an extensive answer because it is an extensive package of support. The two key things that I should point out to my hon. Friend are the £42 million-plus package, which will support in various ways those organisations facing difficulties because of the recession, and the hardship fund. That will apply in a number of different ways, and charities and voluntary organisations will find it very useful. In addition, £515 million of support is available generally from the Office of the Third Sector. All those things coming together will provide significant help through these difficult times.

Robert Key: Please will the Minister make an assessment of the impact, during the economic downturn, on charities and others of the area charging regime used by water companies? The rain tax is having a substantial impact across the country. There is not a charitable organisation in my constituency, be it a charity shop, a scout group, a church or any other voluntary group, that is not being adversely affected by the tax.

Angela Smith: I certainly understand the point that the hon. Gentleman makes, because all of us, as individual Members of Parliament, receive correspondence from a wide range of organisations in our constituencies. I understand that this matter is being examined by the regulators and that Ministers have been talking to them in order to look into it.

Geoffrey Robinson: Will my right hon. Friend find time to examine the proposal made only a few months ago—I understand that it is still subject to detailed evaluation in her Department—for lifetime legacies to be brought into the field of charitable giving? That would make a big difference at a time of great difficulty for charities.

Angela Smith: My hon. Friend makes a valuable point. I know that other countries, in particular the United States, have taken on board lifetime legacies in a significant way. I shall look into the matter, because we want to ensure that charities, the voluntary sector and the third sector as a whole can access support when they need it. That is one area that we can consider.

Nick Hurd: May I press the new Minister for a better answer to the question put by my hon. Friend the Member for Salisbury (Robert Key)? Church groups, scout groups and sports clubs face crippling hikes in their water bills as a result of the proposed changes. Three months ago, I asked the previous Minister whether he would consider a moratorium, at least until an impact assessment was carried out. He said that he would speak to colleagues across Government, but we have heard nothing and time is running out. In welcoming the members of the new team, may I ask them what their view is? Will they consider a moratorium or the idea of a special social tariff, or will they continue the policy of doing nothing?

Angela Smith: That is an interesting question from the party that privatised the water industry, which has had a direct impact on the bills that are being seen today. After three weeks in office, I do not have a final answer for the hon. Gentleman and I am sure that he will understand that I want to look into the matter. We understand the concerns that have been raised and we are talking to colleagues in Government and the regulators about the issue.

Natascha Engel: My right hon. Friend will be aware that among the hardest hit by the recession are young people. How will the hardship fund in particular, and the voluntary sector in general, help young people to obtain the necessary skills that they need to get through the recession and find much needed jobs at the end of it?

Angela Smith: My hon. Friend has hit on a key point. By volunteering or becoming involved in the third sector, people gain skills that help them into employment. For young people specifically, I would point her to the charity v, which has significant funding from the Government and is building a database of volunteering opportunities for young people. Many of those enable young people to gain skills that will lead them into work. V also provides support to ensure that volunteering is an activity that builds new skills.

Democratic Renewal

David Heathcoat-Amory: What discussions she has had with ministerial colleagues on co-ordination of Government policy on democratic renewal.

Tessa Jowell: As the right hon. Gentleman will be aware, there have been extensive ministerial discussions about democratic renewal. The Prime Minister has announced the creation of a new democratic renewal council to drive forward the Government's commitment to further reform. We have already introduced the Parliamentary Standards Bill and published our draft legislative programme, which includes the Constitutional Renewal Bill.

David Heathcoat-Amory: The Minister mentioned the Prime Minister. Is she aware that he wrote two letters in March to Sir Christopher Kelly and the Committee on Standards in Public Life, asking the committee to look into the whole question of Members' remuneration, allowances and outside interests, covering what the Prime Minister called "the full picture"? Why then are the Government rushing through the House a Bill on the constitution that deals with precisely those matters before Sir Christopher Kelly's recommendations? Is not this all about bad government and saving the Prime Minister's political skin?

Tessa Jowell: No, the Prime Minister's sole concern is to restore public confidence in politics and the way in which this House and Members conduct their business. That is why he took the initiative, in the light of all the expenses revelations, to bring forward specific proposals. He has made it clear that Sir Christopher Kelly's inquiry is independent and that we will accept its recommendations when they are published in the autumn. However, it was clear that the public wanted action now, and the Prime Minister and the Government have acted on that.

Gregory Campbell: Does the Paymaster General agree that it is most unfortunate that Sir Christopher Kelly's inquiry, ranging as it does across all aspects of the House, has chosen today to be in Northern Ireland, when it is Prime Minister's questions and the majority of Members from Northern Ireland are likely to be here? I hope that it is not a harbinger of things to come in terms of Members' access to the inquiry.

Tessa Jowell: As Sir Christopher Kelly is the independent chairman of that independent inquiry, he is free to make the arrangements that he needs to make to take the views of the public in every area of the United Kingdom, and I am sure that we all welcome that. I am sure that he will learn a lot from the feedback of the people of Northern Ireland today.

Jim Devine: Will my right hon. Friend, as part of this discussion about democratic renewal, include the abolition of the Act of Settlement, which is simply legalised sectarianism and has no role in the 21st century?

Tessa Jowell: I do not think that I would be being candid with my hon. Friend were I not to say that that is not part of the provisions of the draft Constitutional Renewal Bill.

Jennifer Willott: While I welcome the Government's new-found desire for democratic reform, the National Democratic Renewal Council—a closed Cabinet Sub-Committee made up solely of Labour Members and therefore neither national nor democratic—is possibly the worst way to do that. Will the new ministerial team reconsider that secrecy and, instead, set up a citizens convention to ensure the widest possible public involvement and support?

Tessa Jowell: The National Democratic Renewal Council is part of the machinery of government, and the hon. Lady is absolutely right to say that the relevant Ministers and Secretaries of State sit on it. However, it is associated with a wider, more extensive and deeper commitment to engagement with the public in debating these issues than has ever been the case before. I am quite sure that proper consideration will be given to the arguments not just for a citizens commission—an argument with which I am familiar—but for other forms of sustained public engagement that will shape the conclusions of the consultation.

Charities (Economic Downturn)

Julie Morgan: What recent assessment she has made of the effects of the economic situation on the charitable sector.

Angela Smith: I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Glasgow, North-West (John Robertson). The recession affects different organisations in many different ways, and that is why we have provided a significant package of support that has different elements to it—support for volunteers, grants for small organisations, social enterprises and support for jobs, as well as loans to assist partnership working.

Julie Morgan: I thank the Minister for her reply. On Monday, Cancer Care Cymru, which is a local charity based in my constituency and which funds specialist cancer nurses to work closely with people who are suffering from cancer and receiving treatment in the NHS, announced that it was closing because of a slump in fundraising. That is a terrible loss for people suffering from cancer in the Cardiff area. What can we do on a general level to help to stop such closures?

Angela Smith: My hon. Friend has raised a very serious issue, which could be happening in different places, but I recommend that she looks at the different funding that is available. First, I recommend the hardship fund that will be in place at the end of this month. I also suggest that she looks at the package of £42 million that is available to provide real help now, and she might find that there is a way there to help the local community. Support is also being given through the National Council for Voluntary Organisations to help organisations with things such as fundraising, because that is key for things such as cancer care. She might find that there is some support there that she can talk to the NCVO about, so that her charity can get some extra support with fundraising, too.

Ann Winterton: Is the Minister aware that the very hardest hit in the charitable sector are the small charities that provide services that are much valued locally and that will not be provided by any of the statutory or larger organisations? I am referring to small charities such as the young mental health charity in my constituency. What advice can she give Members of Parliament and others to try to help these small charities to survive the present recession?

Angela Smith: The hon. Lady makes a significant point. It is often the smallest charities that make a real difference to people's lives on the ground. May I direct her to the funding that is available through the grassroots grants? About £130 million is available that is issued locally. In her area, there will be a department of a third sector organisation issuing those funds in sums of anything from £5,000 to a few hundred pounds. On the ground, that can make a real difference. If she has any problems, I ask her please to come to me, and we can direct her to the funding in her area.

Albert Owen: The Royal National Lifeboat Institution relies totally on donations from the public. I declare an interest as a member of its national council. One of the burdens that it faces in this recession, and has faced throughout its existence, is the VAT that it has to pay on equipment and fittings. Will the Minister take that matter up with colleagues in other Departments to try to get some sort of exemption so that the RNLI can carry out its work on behalf of us all?

Angela Smith: I pay tribute to the RNLI for its work. In a previous life, I met its representatives on many occasions. This is a matter for the Treasury, but we will draw my hon. Friend's comments to the attention of Treasury Ministers— [ Interruption. ]

Mr. Speaker: Order. There is quite a hubbub of private conversations taking place, and I note that some of the people busily chattering away have already had the good fortune to ask a question. I hope that they will extend a similar courtesy to others.

Community Asset Transfers

Graham Stuart: What steps her Department is taking to facilitate community asset transfers.

Angela Smith: The stronger and more sustainable third sector organisations are, the better they can help to build stronger and more resilient communities. To that end, my Department is funding a £30 million community assets programme and we are working with the Big Lottery Fund to refurbish underused buildings in 38 communities across England. We are also working across Government to invest in community assets: for example, the Department for Communities and Local Government has invested in the £70 million Communitybuilders programme.

Graham Stuart: I thank the Minister for her reply, but will she say what assessment she has made of the effectiveness of the Big Lottery Fund in administering the scheme?

Angela Smith: The scheme got off to a slow start because the work had to be put in place, but we now have 38 different organisations receiving significant grants from the Big Lottery Fund. Those grants will make a real difference on the ground, and I am pleased with how matters are now progressing.

Joan Walley: In my constituency, the local council wants to transfer the assets of community centres to the local community. However, is my right hon. Friend aware that the people running centres such as the Norton community centre do not want the responsibility of taking on contractual and employment liabilities?

Angela Smith: My hon. Friend raises an issue that concerns many people. When we talk about community asset transfers, we are talking about the Government putting in money to support organisations and communities. The will to do that has come from the communities themselves. With community asset transfers, the liability is transferred not to the community but to an asset. Local councils must realise that the scheme is funded by the Government for local communities. It must not be forced on local communities, but should be carried out with their co-operation and direction.

Third Sector Funding

Stewart Jackson: How much funding her Department has allocated to charities and the voluntary sector from the (a) Capacitybuilders and (b) Communitybuilders fund in the last 12 months.

Angela Smith: In the last financial year, Capacitybuilders allocated over £24 million to charities and voluntary sector organisations. Communitybuilders was announced in the Department for Communities and Local Government White Paper "Communities in Control" in July 2008. As planned, the programme will be open for applications this summer, and its national partner will be the Adventure Capital Fund.

Stewart Jackson: Will the Minister say what progress has been made with the reform of gift aid?

Angela Smith: The gift aid programme is making good progress, and it gives charities a significant amount of additional money. A recent specific reform is that the profits generated when goods given to charity shops are sold can be donated as gift aid to the organisations involved. There is further work to be done with gift aid, and I understand that the Treasury is looking at it at the moment, in consultation with Ministers.

Grassroots Grants

Anthony Steen: What criteria her Department uses to allocate Grassroots grants to local community organisations.

Angela Smith: The grassroots grants scheme is worth £130 million and provides small grants and endowments for local community groups. The beauty of the programme is that local communities make the funding decisions, based on local priorities. So far, almost 10,000 grants have been awarded, to the benefit of many organisations that had not benefited before. The criteria set by the Government are that the recipients are bona fide third sector organisations with an income below £30,000, that they meet the needs of the local community and that they are driven by committed local volunteers.

Anthony Steen: The number of children trafficked into Britain is increasing. The police cannot cope, and local authorities are finding that the children abscond from their homes. Why will the Government support local, voluntary and community groups more, as they can provide guardianship, legal advice and support for children in distress? I hope that the Minister does not mention the POPPY project, as that deals only with adults. Why are the Government not supporting voluntary and community effort more, when the public sector is failing?

Angela Smith: I am not aware of any applications under the grassroots fund for the sort of organisations that the hon. Gentleman has referred to. However, the money in the grassroots fund has been well received, and we will be happy to look at applications from any organisation.

Charities (Economic Downturn)

Philip Hollobone: What steps the Government have taken to assist charities that have been affected by the failure of Icelandic banks; and if she will make a statement.

Angela Smith: The Government have taken unprecedented steps to help third sector organisations affected by all aspects of the international economic crisis. We have listened to the sector, including those organisations affected by the Icelandic banking collapse. The packages announced in the real help for communities fund and the more recently announced hardship fund total £59 million. That clearly demonstrates our commitment to supporting the sector through difficult times.

Philip Hollobone: A large number of charities have had their assets frozen as a result of the Icelandic banking collapse. Why have the Government ignored the Treasury Committee's recommendation for compensation, and will the Government consider establishing a short-term Treasury loan fund to help out sound charities facing genuine hardship?  [Interruption.]

Mr. Speaker: Order. Can we have a bit of hush, so that we can hear the Minister's reply?

Angela Smith: The Government are doing an enormous, unprecedented amount to help charities and voluntary sector organisations that are facing difficulties in the recession. The hon. Gentleman outlined the situation facing one group of organisations. I have to say to him that it would be difficult to single out one particular organisation or reason. The hardship fund that is in place, which is real help now, is a greater package than has ever been in place to help charities through difficult times. It has never been matched by any previous Government.

Gerald Kaufman: Will my right hon. Friend congratulate the beloved Christie cancer hospital in Manchester on its successful campaign to obtain a refund of charity money lost following the collapse of an Icelandic bank? Will she thank the Government for arranging that refund, and will she congratulate Lord Bradley on heading that successful campaign?

Angela Smith: Everyone is always pleased—indeed, the Prime Minister has said so himself—when organisations that are in difficulties gain support. The refund was a local decision, taken by NHS North West, responding to a local need. We are all very pleased to see Christie getting the support that it deserves.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Bob Spink: If he will list his official engagements for Wednesday 1 July.

Gordon Brown: With your permission, Mr. Speaker, the whole House will wish to join me in welcoming today Her Majesty the Queen's approval for a new form of recognition for the families of those members of the armed forces killed on operations and as a result of terrorism. Her Majesty will be making an announcement today, directly to the families of armed forces personnel, in which she will make clear her personal attachment to the new recognition. I am confident that that will be a very special and fitting tribute indeed to the great debt that we owe to all those who die on operations, and to the enduring loss shouldered by their families.
	This morning I met ministerial colleagues and others. I shall have further such meetings later today.

Bob Spink: Our armed forces are the bravest and the best in the world, and in the armed forces day celebrations on Saturday the people showed how much they love and respect them.
	May I ask the Prime Minister about swine flu? A number of people in Castle Point—adults and children—have tested positive, and the local campaigning newspaper, the  Echo, is keen to reassure people that progress is being made. What will he do next to tackle the problem?

Gordon Brown: I share with the hon. Gentleman the respect that he has stated for our armed forces, and for the armed forces day on Saturday, when thousands of people in all parts of the country wanted to give recognition—deserved recognition—to the work that our armed forces do every day.
	The hon. Gentleman raises the question of swine flu. He may know that we have had an emergency meeting of the Cobra group—the civil contingencies secretariat—today to look at the incidence of the disease. I have to report to the House that the total number of confirmed cases for the UK now stands at 6,538. That compares with just 2,236 last week. That large rise in numbers of confirmed cases means that a more flexible and local approach will be used in areas where there are higher numbers of cases reported. The Health Protection Agency, in conjunction with the NHS, is doing excellent work to limit the spread of the virus. We continue to monitor the situation closely, making sure that arrangements are in place so that the UK remains well placed to deal with the pandemic. We will adapt those arrangements as the situation changes, and my right hon. Friend the Health Secretary will make a statement to this House tomorrow on the outcome of our deliberations.

James McGovern: I welcome what the Prime Minister said about the armed forces. My grandfather, Hugh MacDonald, served in the Black Watch during the second world war. He is buried in the Black Watch section of the military cemetery in Gibraltar. The House will excuse me for using Scottish vernacular, but I fear that he might be birling in his grave at the thought that the famous red hackle of the Black Watch may be no more. What assurances can the Prime Minister give, not only to me but to serving personnel and veterans, whom I met on Saturday, that the Black Watch red hackle will remain the symbol of the Black Watch?

Gordon Brown: I, too, met Black Watch servicemen on Saturday and people who have contributed greatly to our armed forces. I can assure my hon. Friend that the tradition that he talks about will be maintained as long as the Army exists.

David Cameron: I welcome what the Prime Minister said, and I agree with him about the Queen's new recognition for our armed forces—we should all be incredibly proud of what they do on our behalf.
	Last week, it was demonstrated for everyone to see that capital spending under Labour will be cut. Now I want to turn to total spending. Does the Prime Minister accept that his own figures show that once the Treasury's forecast for inflation is taken into account, total spending will be cut after 2011?

Gordon Brown: No, total spending will continue to rise, and it will be a zero per cent. rise in 2013-14. In 2011-12 and 2012-13, it will continue to rise— [ Interruption. ]

Mr. Speaker: Order. The Prime Minister's answer must be heard.

David Cameron: I think that that answer gets zero per cent. The Prime Minister said very clearly no, it will rise, so can he explain a copy of a Treasury presentation that was given to us? On page 7, there are headings for current spending and capital spending, and the headline says very clearly: "Reduction in medium-term spending". May I ask the Prime Minister, if even the Treasury is giving presentations around the country saying that public spending as a total is being cut, why cannot he admit to the truth?

Gordon Brown: I have told the right hon. Gentleman previously that current spending is going to rise, and that capital spending, as I explained last week, will fall after 2011. These are the public spending projections for the future, but I have to tell him that the debate about public spending is about how we return to growth and jobs in the economy. The reason we have advanced spending to 2009-10 is so that we can spend to get out of recession. We put forward proposals for homes and jobs, and for more money in 2009-10. The Opposition have rejected this expenditure. We have put forward proposals for expenditure in 2010-11—increasing expenditure, and the Opposition have rejected that.
	The capital spending that we have advanced to 2009-10 and 2010-11 is therefore not available after 2011. This is precisely the way in which a Government will act to take the country out of recession, and I must therefore ask the right hon. Gentleman why— [ Interruption. ] Oh yes. His shadow Chancellor should explain why he was going into television studios yesterday saying that he was going to cut schools now, cut Sure Start now, cut the September guarantee for school leavers now, and do nothing about unemployment. That is surely the issue: we cannot get out of recession unless we spend now on the services that we need.

David Cameron: Today we see a Prime Minister in full retreat. In the first answer, he says that we are going to get a zero per cent. increase in public spending—that is a new one. In the second answer, he finally admits that he is going to cut, and cut deeply, capital spending. He talks about the debate about public spending: the debate is about whether the Prime Minister can be straight with the British public. Let me ask him again. He stood at the Dispatch Box and talked about total spending year after year—that is the figure that people are interested in. As the Treasury itself says, when it comes to total spending, there is a reduction, not a freeze, in medium-term spending—I am glad that the Prime Minister is talking to the Chancellor for the first time in weeks—and given that it is talking about a cut, will the Prime Minister stand there, give a straight answer and say that once we allow for inflation, total spending is being cut?

Gordon Brown: I have already said that current expenditure will rise, and continue to rise. Capital spending will rise until 2011, then it will fall. I have already made it clear that for health, education and for all these public services current spending will continue to rise. The issue is surely this: in 2009-10, we are raising spending substantially. We are doing so in 2010-11, and we are doing it to take us out of recession. There is only one serious party in the world that is trying to tell us that we should cut spending now—the Conservative party. The right hon. Gentleman must therefore admit that under his proposals, schools would lose money now, teachers would be made unemployed, Sure Start services would go, child care services would be at risk, and no teenager would get a guarantee for jobs. That is the future if the Conservatives were ever to implement it.

David Cameron: Complete nonsense. Nobody— [Interruption.] It is interesting that not even the Prime Minister's own Cabinet now backs the ludicrous line that he is taking about public spending. He keeps talking about this 10 per cent. I do not know whether he realises how much damage it is doing to him. It is not doing any damage to us. Let us explain where the deceit about the 10 per cent. comes from. Let me explain to the House— [Interruption.]

Mr. Speaker: Order. The Leader of the Opposition must be heard.

David Cameron: If we take the Government's own spending plans, take off debt interest and take off the increase for unemployment, which, sadly, will go up, we are left with a 7 per cent. cut in every Department—the Government's own figures. If we exempt the NHS, we get a 10 per cent. cut—the Government's own figures. If we take out— [Interruption.] Thank you, Schools Secretary. If we listen to the Schools Secretary and take out health and schools, we get a 13½ per cent. cut. That is the Prime Minister: Mr. 13½ per cent.—his own figures. Let us see if he can answer the simplest of questions. Is he going to have a full departmental spending review before the election—yes or no?

Gordon Brown: The first thing that the right hon. Gentleman said was that unemployment is going to continue to go up. That is the Conservative policy. It is a prediction. That is when they say that unemployment is a price worth paying. Is he basing his assumptions on unemployment rising to 2014? No wonder he wants to cut public services. He is basing his assumptions on unemployment continuing to rise, because he will do absolutely nothing about it. We have taken action that is preserving 500,000 jobs. A quarter of a million people are leaving the unemployment register every month. We put in extra money on Monday so that there is more for young people who are unemployed and for summer school leavers. We will not forecast our spending plans on unemployment being higher in 2014 and rising every year, but if that is what the right hon. Gentleman wants to do, he cannot afford public services. Therefore the truth is that he will be cutting public services by 10 per cent.

David Cameron: I have to say that this is one of the most feeble performances that I have ever seen from the Prime Minister. If Peter Mandelson had not been so busy wandering round the television studios this morning, he could have given him a bit of tuition. There is only one person who we want to add to the unemployment register, and that is this Prime Minister. I asked a simple and straightforward question. Perhaps he could now answer it. Peter Mandelson has said that there will not be a spending review before the election. Can the Prime Minister tell us—will there be one or not?

Gordon Brown: It would be wrong to have a spending review now, at this stage—[Hon. Members: "Why?"] Because we are in the midst of a recession and it is not possible to say what unemployment, growth and all the characteristics that the right hon. Gentleman has been referring to are likely to be in 2012, 2013 and 2014. We have got to the heart of the Conservative position today. They are the party of unemployment. They are premising all their spending plans on unemployment continuing to rise. He said himself that unemployment will keep on rising. If that is the basis of their spending plans, people can look forward, under a Conservative Government, not just to 10 per cent. cuts, but to rising unemployment. Why do they want these public spending cuts? To pay for inheritance tax cuts for the very rich. We see once again that they are the party of the few, and we are the party of the many.

David Cameron: I know the walls of the bunker are thick, but the Prime Minister seems completely unaware that unemployment is rising across the country because of the policies of his Government. We have seen hundreds of people lose their jobs at Diageo in Scotland—another tragic case—yet the Prime Minister seems blissfully unaware of what is going on in the country that he is meant to be governing. Everyone will conclude that the Government will not have a spending review because they do not want to own up to the cuts that they are planning in Department after Department. The truth is that this Government are planning to cut capital spending: fact. They are planning to cut total spending: fact. The most important fact of all is that they are incapable of being straight with the British people.

Gordon Brown: This Opposition would cut public spending this year and deprive people of help with unemployment and housing. This Opposition party would cut public spending next year, and cut it savagely in schools, in education and even in the Sure Start programme. We now know the truth about the Conservatives' assumptions about the future: they assume that unemployment will continue to rise, as the right hon. Gentleman said, until 2014. That is not the policy of this Government; we want to get people back into work.

Colin Challen: Does the second franchise fiasco on the east coast main line in two years not tell us that the Tory rail privatisation experiment has finally hit the buffers? Now that we are taking the east coast main line back into public ownership, can we keep it that way?

Gordon Brown: Our first and overriding obligation is to ensure continuity of service to the passengers, and that there is no disruption of services, so the Secretary of State for Transport is establishing a publicly owned company, the East Coast Main Line company. It will take over all franchised rail services at the point that National Express East Coast ceases to operate, and existing staff and assets will transfer to the new company. We are making sure that the service continues to run, that passengers continue to be served and that jobs continue to exist.

Nicholas Clegg: I first join in welcoming the announcement from Her Majesty today for such a fitting tribute to recognise the bravery and sacrifices of our armed forces.
	This afternoon we have seen the bogus debate about public spending hit new lows. I am almost tempted to suggest that Lord Mandelson and the Conservative economic spokesman go on another cruise together to make up. The real failing is that the Conservative party leader wants to cut spending when the economy is still on its knees, which is economic madness, and he will not tell us how; and the Prime Minister is still living in complete denial about the long-term savings that will be needed when the economy starts to recover. Are they not both deliberately choosing to trade insults so that they can both avoid telling the truth?

Gordon Brown: The right hon. Gentleman does not tell us what his policy is at all. The fact of the matter is that if spending were cut this year, jobs would be lost and services would be put at risk; and if spending were cut next year, jobs would be lost and services would be at risk. We are determined to ensure that spending remains in order to increase job opportunities and to protect home owners, and to make sure that our public services are in place. I hope that he will join our side of the debate in protecting public services for the future.

Nicholas Clegg: What the Prime Minister is avoiding once again is the fact that difficult choices on long-term spending need to be made now if we are going to get any grip on the country's finances. That is why we should admit that we neither need nor can afford to replace Trident. He is planning to sign the first contracts for the new Trident submarines this summer, during the recess when we are all away. Is it not obvious that he should not do that?

Gordon Brown: We have already announced a deficit-reduction plan for the next five years. We have taken difficult decisions about efficiency savings and asset sales, and about raising the top rate of tax: about measures that ensure that people who are in a position to pay more do pay more in the tax system—that is, at the top rate of tax. I hope that the right hon. Gentleman will support those measures, which are designed both to reduce the deficit and to ensure that there are sufficient resources for public services. I have already made my position on Trident clear—in the debate on Monday.

Angela Smith: Last week Corus announced 379 job losses in the steelworking town of Stocksbridge in my constituency—job losses that will have a devastating impact on the economy of a town with a population of only 13,500. Will my right hon. Friend make a commitment to do whatever he can to ensure that Corus can secure a long-term future for steelworking in places such as Stocksbridge?

Gordon Brown: Corus employs more than 20,000 people in this country, and wherever there are redundancies it is a matter of sadness and regret. We are dealing with a fall in demand in the steel industry throughout the world, and it is affecting Britain and every other country. We are in talks with Corus, we have provided extra money in the past week for help to secure jobs and we will continue to talk with it about what more we can do. We are also in negotiations with Corus about its relationship with a conglomerate of steel producers. That contract has broken down; it puts jobs in Britain at risk; and we are trying to do what we can to ensure the agreement of a new arrangement that can protect more jobs in Britain.

David Gauke: The Prime Minister has twice told the House today that capital spending will continue to rise until 2011. The Red Book shows that capital spending is at £44 billion this year and will be at £36 billion next year. I am sure that the Prime Minister understands that that means a cut, starting next year. Will he correct the record now?

Gordon Brown: As I have already explained to the House, we are bringing forward investment, previously allocated for later years, to 2009-10 and 2010-11. The reason why we are doing so is that we can help get the economy out of the recession. The capital investment would not be supported by the Conservative party. As a result, projects such as housing, in which we are investing from this Monday, as we have announced, could not go ahead. I have already explained to the House that while the previous Budget announced that there was a rise in capital expenditure over a period of time, more money has been reallocated to the first years so that we can help ourselves out of recession.

Eric Martlew: There has been a great deal of talk about the modernisation of the House, but I would like to ask the Prime Minister whether we could go back in time—to when we had Prime Minister's Question Time twice a week, on Tuesdays and Thursdays. There would be much more accountability to Back Benchers, the questions would be more topical and the Chamber would be much better attended on Thursdays.

Gordon Brown: That is an idea on which Mr. Speaker may wish to consult.

Simon Hughes: As more than 1 million of our young people leave education this summer, the Government's rediscovered commitment to training and apprenticeships is very welcome. However, it appears that many of the training schemes on offer cannot be completed in the time that the Government have announced. Will the Prime Minister meet a group of us to make sure that we do not consign our young people to unemployment or to a failure to gain the qualifications that they need?

Gordon Brown: As the hon. Gentleman should know, in 1997 there were 70,000 apprenticeships in Britain; this year, there are 225,000—three times as many. To say that we have reduced the number of apprenticeships, or that we are not taking the issue seriously, is wrong. As far as training programmes are concerned, on Monday we announced how we would do more for summer school leavers and for young people under 25. I hope that the hon. Gentleman will support the new investment that we have made into those measures. They cost money; I hope that his party is prepared to support them, even if the Conservative party is not.

Neil Turner: This Labour Government have made a lot of progress in tackling disadvantaged communities, such as Pemberton, Scholes and Beech Hill in my constituency, through the neighbourhood renewal fund. However, local authorities and primary care trusts are hampered from building on that success because they do not get the money that the Government formula tells them they are entitled to. Will my right hon. Friend meet me, and other colleagues with similar constituencies, to see whether we can find ways to tackle the problem?

Gordon Brown: I understand that Wigan will receive more than £21 million between 2008-09 and 2010-11 as an additional resource to help tackle problems faced by local people. Of course I am happy to meet my hon. Friend to talk about both the neighbourhood renewal fund and some other aspects of central funding to local authorities, but I do say that in the past few years we have increased those resources substantially. Where there is unemployment, we will be increasing resources to help people get back to work.

Mark Simmonds: In the light of recent cuts of £3.9 billion in Department of Health funding, as announced in the Budget, will the Prime Minister confirm what further reductions in health expenditure his Government are planning for between 2011 and 2014?

Gordon Brown: We are raising expenditure on the health service this year and next year. The hon. Gentleman should know perfectly well that we have done so against the advice of the Conservative party, which would prefer to see— [ Interruption.] If we had not taken the decision to raise national insurance to put investment in the national health service, we could not have had the 90,000 extra nurses, the 20,000 extra doctors and the new hospitals. That decision was opposed by the Conservative party.

Denis MacShane: In a few days' time, the newly elected European Parliament sits for the first time. Can the Prime Minister assure me that Labour MEPs will not sit with Polish MEPs who are homophobic and of an anti-Semitic orientation, with Czech MEPs who believe that global warming is a myth, or with Dutch MEPs who think that abortion should be abolished and that Sunday shopping should stop? Which party does support those loonies and weirdos?

Gordon Brown: It took the Leader of the Opposition almost a year to admit that there was a recession all over Europe. Now that he has had to admit it, perhaps he should also admit that there is a need for co-operation all over Europe to deal with these issues. What I think people will find very sad is a Conservative party now on the fringes of Europe with some of the extreme parties on the right wing of the European political family.

Jo Swinson: News of tomorrow's statement is welcome, but if the swine flu pandemic worsens sufficiently to trigger changes in the Government's approach during the 82-day summer recess, would the Prime Minister recall Parliament so that there could be proper scrutiny of the Government's actions?

Gordon Brown: The hon. Lady will know that the Health Secretary will make a statement tomorrow on the issue of swine flu. We will make sure that at all points we are vigilant in ensuring that the treatment of that disease in every part of the country is right and proper.

Gordon Banks: My right hon. Friend may have seen today's announcement by Diageo on the restructuring of jobs in Scotland, to which the Leader of the Opposition referred. It was mixed news, with 500 job losses over two years but also £100 million of investment, including in my constituency. Will my right hon. Friend do everything he can to negate the loss of these jobs, and will he agree to meet the company to discuss its continued plans for investment in Scotland?

Gordon Brown: Where there is unemployment, we are ready to help. The measures that we announced on Monday will move in to help young people, but also adults who are losing their jobs. It is possible for firms making capital investment to get new capital allowances which were introduced in the Budget to stimulate new investment. We are seeking an investment-led recovery. The capital spending that we have reallocated to 2008-09 and 2009-10, while it falls in 2010-11, is vital to doing that. We will continue to back private investment in our country, and these are the figures that I want to make clear to the House.

Lembit �pik: As chair of the all-party Baha'i group, I have become deeply concerned about the seven Baha'i leaders in Iran facing trial by the revolutionary court on 11 July on serious but unsubstantiated charges, with no evidence being offered against them. Will the Prime Minister be willing to meet me and representatives of the Baha'i faith in Britain to underline his and, I hope, our collective support for the fundamental principles of fairness and tolerance in the treatment of these and all Baha'i in Iran?

Gordon Brown: The hon. Gentleman raises very difficult issues. I am sure that the whole House will share my deep disappointment at the recent behaviour of the Iranian regime: disappointment at the manner in which legitimate demonstrations have been suppressed; disappointment at the restrictions that he has mentioned on the freedoms of the Iranian people, with people due to stand before a closed court on 11 July; and disappointment that the Iranian Government have expelled two of our diplomats and detained several of our embassy staff. This action is unjustified and unacceptable. Some people in Iran are seeking to use Britain as an explanation for the legitimate Iranian voices calling for greater openness and democracy. However, we will continue, with our international partners, to raise our concerns with Iran, including on the issue that the hon. Gentleman raised.

Linda Riordan: Following job cuts announced by Lloyds, will the Prime Minister assure banking staff in my constituency that he will do all he can to protect their jobs? Will he join me in sending a clear message to Lloyds Banking Group that further job losses would be totally unacceptable?

Gordon Brown: I have visited the area and talked to staff, and I understand their frustrations at what is happening. They have served the bank well, and they are the victims of what has happened to HBOS in its worldwide activities, particularly its failures in other countries. We will do what we can to help the staff of HBOS and Lloyds TSB. We are also making it possible for people to have new facilities to find jobs in the area. We will do what we can to reduce unemployment in these difficult circumstances; that is why we have set aside 5 billion to help the unemployed, which is only possible because we have made these additional allocations.

Adam Holloway: Another opportunity for the Prime Minister to be straight with the British people: in which Departments does he expect to see spending fall between 2011 and 2014?

Gordon Brown: Being straight with the British people means talking about how we get out of recession and how we build for growth. It is not much good the Opposition's talking about 2011 when they are cutting spending in 2009-10 and 2010-11. Throughout this debate, they have refused to support the action we are taking on jobs. They have no plan to come out of recession, they have no plan for jobs, and they have no plan for growth in the economy: they have nothing to offer the British electorate but cheap gibes and no policy.

Virendra Sharma: Does my right hon. Friend believe that to build Britain's future we need to invest now in helping people through the downturn, and especially in young people's training and skills?  [Interruption.] Will he reaffirm his September guarantee of a place in education and training for all 16 and 17-year-olds?

Gordon Brown: I do not know why the Opposition mock this. Giving a guarantee for school leavers to get a school place, a college place, an apprenticeship or work experiencesome form of activity that prevents them from being unemployedhas never been done before. That costs money, and we are prepared to spend that money. The Opposition party would refuse that money. In other words, thousands would be unemployed as a result of the Opposition's policy.

Geoffrey Clifton-Brown: Is the Prime Minister aware that some of the finest residential training for severely disabled people has been put in jeopardy by the decision this week of the Learning and Skills Council not to fund the expansion of the National Star college in my constituency? Would he agree to meet a delegation of some of the disabled students, some of the principals of the college and myself, to discuss the unique situation of that college and see whether there is a solution to this problem?

Gordon Brown: We have set aside 2.3 billion for investment in further education colleges over this spending review period. We put an additional 300 million into that in the Budget. I will ask [Interruption.] This comes under expenditure on colleges, and it needs money that would have to be provided by the Government. I am saying to the hon. Gentleman that I shall get the further education colleges Minister to meet him about this, but we have put 300 million extra into the investment in capital buildings as a result of the Budget.

Points of Order

Angus Robertson: On a point of order, Mr. Speaker. We have learned overnight that two of the UK's three shipyards may close in the years ahead. Given that that would cause thousands of job losses on the Clyde or at Portsmouth, have you heard from Ministers in the Ministry of Defence whether it is going to make a statement to this House or leave the Chamber without telling Members of Parliament what the future holds for shipyard workers in this country?

Mr. Speaker: I fear that is not a point of order, but I am grateful to the hon. Gentleman for placing his views firmly on the record. The answer to his question is that I have not had any indication from a Minister of an intention to make a statement, but, as I said, he has taken his opportunity to place his concerns on the record.

Charles Walker: On a point of order, Mr. Speaker. The previous Prime Minister, Tony Blair, would regularly meet Back Benchers from both sides of the House. Why does not the current Prime Minister extend the same courtesy to us?

Mr. Speaker: That is not a point of order.

Ian Davidson: On a point of order, Mr. Speaker. Is it in order for me to raise the fact that the real threat to the future of the shipyards on the Clyde is the separation of Scotland from the United Kingdom?

Mr. Speaker: That is a debating point but not a point of order, as the hon. Gentleman perfectly well knows.

Stewart Jackson: On a point of order, Mr. Speaker. I seek your guidance. Do you think it appropriate and acceptable that the major decision to renationalise the east coast main line should have been announced on the media this morning, and that this House will not have the opportunity to question the Secretary of State directly? Indeed, we will not even be the first to hear the statement. Do you think that that shows calculated disdain for the authority of this House?

Alan Beith: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. The hon. Member for Peterborough (Mr. Jackson) has raised a point of order, and I am sure that the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) will want to hear the reply.
	My understanding is that there is to be a statement at 7 o'clock this evening. As to the choice of Ministers to head Departments and the particular House of Parliament in which they sit, as the hon. Gentleman will know, that is not a matter for me.

John Robertson: On a point of order, Mr. Speaker. Is it right that a political party should misuse an unfounded allegation about shipyards, when the company and the Ministry of Defence refute the allegations that are being made? It always seems to happenevery six months, people use those allegations for their own political purposes.

Mr. Speaker: Something tells me that the hon. Gentleman is seeking to entice me into a political debate, and I must resist his blandishments. That is not a point of order.

Norman Baker: Further to the earlier point of order, Mr. Speaker. It cannot be right for a major statement on the future of our railways to be made by a Secretary of State who is absent from this House. I was grateful for your advice last week, and I have written to the Procedure Committee. However, would not it be far preferable for such statements to be made to this House? Is it not a nonsensical convention that the statement has to be made in the House of Lords first? Should it not be made at 12.30 in this House, rather than waiting for the Lords to assemble further up the Corridor?

Mr. Speaker: The hon. Gentleman is largely repeating what has already been said. I note his point, but I do not think that there is anything on which I can rule at this time.

Alan Beith: Further to that point of order, Mr. Speaker. We were told in a debate in Westminster Hall this morning about rail services that the Minister was not in a position to answer questions about what has happened to the National Express franchise because of the statement to be made in the House of Lords, which would be repeated in the House of Commons. Is there any reason for delaying that statement until 7 o'clock tonight? I presume that it will be made in the House of Lords at 3.30 and could be made much earlier in the Commons.

Mr. Speaker: We have programmed business to consider, so when the right hon. Gentleman asks whether there is any particular reason for not making the statement now, I have given him that reason. Hon. Members may like or dislike it, but that is the reason.

Patrick Cormack: On a point of order, Mr. Speaker. Last week, you promised the House that you would rebuke Ministers if they made announcements outside before making them in the House. On the Today programme this morning, I heard Lord Adonis announcing the nationalisation of the east coast railway a good 11 or 12 hours before the House will be told about it. What, Sir, can you do about that?

Mr. Speaker: My understanding is that the Secretary of State was commenting on commercial announcements that had already been made, so I am not sure whether the burden of the hon. Gentleman's charge can be sustained.

Greg Hands: On a point of order, Mr. Speaker. The Prime Minister and the Secretary of State for Children, Schools and Families visited a school in my constituency yesterday without informing me. I went anyway and was met by an abusive and unprofessional civil servant called Belshan Izzet, who told me that the constituency Member of Parliament had been informed of the visitthat was a lieand that neither I nor the leader of the council nor one of the governors were allowed in during the prime ministerial visit. That is disgraceful behaviour by a civil servant. How can we ensure that it is not repeated and that the Prime Minister and the Secretary of State for Children, Schools and Families abide by the conventions and courtesies of the House, which you set?

Mr. Speaker: The hon. Gentleman is a regular user of the device of the point of order, which he is perfectly entitled to use. Of course, the normal courtesies should be observed, be it by Back Benchers or members of the Government. Members who go into other Members' constituencies should give prior notification. They do not have to ask permission, but they should inform. However, I say in all candour and courtesy to the hon. Gentleman that it would be a bad precedent if Members started naming civil servants on the Floor of the House. I do not like it and I hope that we will not have a repetition of it.

Graham Stuart: Further to that point of order, Mr. Speaker. Ministers appear routinely to visit hon. Members' constituencies without informing them, and your predecessor spoke out as strongly as you have today, asking them to observe the courtesies. However, they are not observing them, so what action can be taken to ensure that they do so in future?

Mr. Speaker: The hon. Gentleman, as is perhaps his wont, asks a hypothetical question and engages in some star-gazing. The convention of notification must be observed. In the event of a pattern of its not being observed, I would not let the matter rest there.

Iain Duncan Smith: Further to the point of order of my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), Mr. Speaker. You said that you thought that the Minister on the Today programme did not refer specifically to the action to be taken about the company. I listened to the programme, and he made it clear and explicit that the Government would take over the responsibilities for that company. It seems to me that he went beyond what was acceptable in an interview and made a statement on air. I do not wish to be pedantic, but that may give you cause to think a little more about your response to the Government.

Mr. Speaker: The right hon. Gentleman makes a very fair point. He had the advantage of hearing the interview and I confess that I did not. What he has put to me is reasonable. I do not know whether the line was crossed, but the fairest thing that I can say on the strength of the right hon. Gentleman's comments is that I will look into the matter and come back about it.

Denis MacShane: On a point of order, Mr. Speaker. Last week I spoke to the Fabian Society in Chiswick and Sheffield, and I would like to apologise for not informing the hon. Members whose constituencies I was in. However, senior Conservatives regularly come to my constituency and do not tell me, although I do not worry about that, because every time they appear, the Tory vote goes down.

Mr. Speaker: I am extremely grateful to the right hon. Gentleman, who is continuing the debate, although I am not sure that he is doing so by a point of order.

Peter Bone: rose

Mr. Speaker: I hope that we are going to make some progress, as we have a great deal of business to consider, but the proceedings would not be complete without a point of order from Mr. Peter Bone.

Peter Bone: On a point of order, Mr. Speaker. A number of clauses of the Parliamentary Standards Bill were left undebated in Committee yesterday. I have listened to your pronouncements on transparency and the power of Back Benchers to cross-examine the Executive, but what happened yesterday was wholly unacceptable. I therefore wonder what advice you could give a Back Bencher to determine this matter.

Mr. Speaker: There will be further opportunity to debate some of those matters on Report. I have seen the sheer weight of amendments to the Bill and I am not insensitive to the point that there is a need for substantial time to debate them. However, at this stage I can say to the hon. Gentleman only that everything has been done in a perfectly orderly way, and in any event, Rome was not built in a day.

William Cash: On a point of order, Mr. Speaker. With respect to the Parliamentary Standards Bill this afternoon, could you give us some guidance as to how you will approach the question of amendments that may be moved on Report, given that, as you have said, very weighty questions arisefor example, on new clauses 7 and 8, which may not be reached, because new clauses are taken at the beginning on Reportand could you therefore also say whether you would be kind enough to consider those questions before Report?

Mr. Speaker: I will consider those questions when I am aware of all the amendments that are before us, but it would be unwise and precipitate for me to do so at this stage. If there are no further points of order, we can move on.

BILL PRESENTED
	  
	Sustainable Energy (Local Plans) Bill

Presentation and First Reading (Standing Order No. 57)
	Alan Simpson, supported by Mr. John Gummer, Mr. Gordon Prentice, Andrew Stunell, Mr. David Amess, Mr. Andrew Dismore, David Howarth, Mark Durkan, Andrew George, Mr. David Drew, Bob Russell and Steve Webb, presented a Bill to promote energy efficiency; to require specified bodies to publish sustainable energy plans; to make provision for the transfer of functions to principal councils; and for connected purposes.
	 Bill read the First time; to be read a Second time on Friday 16 October, and to be printed (Bill 125).

Dangerous Dogs (Amendment)

Motion for leave to introduce a Bill (Standing Order No. 23)

Angela Smith: I beg to move,
	That leave be given to bring in a Bill to amend the Dangerous Dogs Act 1991 and the Dangerous Dogs (Amendment) Act 1997; and for connected purposes.
	It is a pleasure to present this Bill to the House today. Before laying out what it is designed to achieve, I would like to pay tribute to the immense commitment shown by Claire Robinson of the Royal Society for the Prevention of Cruelty to Animals and by Dave Joyce of the Communication Workers Union in putting together the campaign to change the law relating to the responsibilities of dog owners.
	Why does the law need changing? At the moment, if a dog attacks in a public place, the owner can be prosecuted. However, this is not the case if the attack takes place on private property, yet there is clearly a problem as far as such attacks are concerned. Let us look at the statistics. Around 6,000 postal workers are attacked by dogs every year, with 70 per cent. of those attacks taking place on private property. In one instance, at Christmas 2007, Paul Coleman, a postal worker in Sheffield, was attacked so badly that he needed skin grafts and plastic surgery. At Christmas 2008, Keith Davies nearly lost a leg in a horrific attack in Cambridge. Of course, we all hear about the horrific attacks on children, who sometimes suffer from awful lifelong disfigurements as a consequence, and sometimes we hear about the terrible deaths that occur when children are attacked in the home by dogs.
	Clause 1 would therefore aim to extend the offence of having a dog dangerously out of control, so that it applied not only to attacks in public places, but to those in private places, such as homes and gardens. For instance, where postmen and women or other workers have to visit properties and are attacked in the gardens or within the dwelling, section 3 of the Dangerous Dogs Act 1991 would apply. It would also cover instances where children are injured and/or killed in the home.
	Such a measure is commanding support from diverse quarters. The Dogs Trust says:
	This Bill... places additional emphasis on dog owners to take responsibility for their dog's behaviour at all times.
	That is an important point. At the moment, if there is an attack on a child or adult by a dog, more often than not, that dog is destroyed, but it is the owner who needs to be the focus of attention and who needs to face the consequences. That point is also supported by the Kennel Club, which says that this part of the Bill is warmly welcomed because greater responsibility is being placed on the owners to ensure that their dogs are not out of control.
	Thanks to a campaign by the RSPCA, nearly 4,000 members of the public contacted their MPs to support the Bill. One comment is particularly worthy of mention. It comes from a mother whose own child was attacked by her own dogs some years ago and who has been campaigning for a change in the law since then. She said to me:
	I wholeheartedly support any moves for safety and find the current situation regarding postal workers and dog aggression wholly unacceptable. The consequences are devastating and life-changing.
	I have met this mother and I can assure the House that, every week, she has to live with what happenedweek-in, week-out; year-in, year-out. Her view is that education is the key to changing attitudes towards dog ownership. Dogs need to be properly trained and owners need to understand that sensible precautions should be followed to protect visitors and children in the home.
	It is common sense that a child should never be left unsupervised in the company of a dog and it is surely not too difficult for dog owners to protect health visitors, meter readers, social workers or even the people who deliver parcels to the door by putting the dog in another room for the duration of a visit or while the door is being opened to a visitor. Surely such simple measures as a post box on the gate or a cage around the letter box in the door would do a great deal to protect postal workers. In that context, the ability to prosecute would be a useful tool for the police to employ in the most extreme cases and it could act as an important deterrent, helping to reinforce the message that education programmes are designed to convey.
	Many other organisations support the measure. The Royal Mail, crucially, is giving it full support, as are the International Institute of Risk and Safety Management, Prospect and the Union of Construction, Allied Trades and Technicians. Unison also supports the measure because of concerns for its members who regularly visit patients and clients at home; while the group safety, health and environment manager of Scottish and Southern Energy has also pledged support. The legal department of the Union of Shop, Distributive and Allied Workers has received 30 claims for dog bites from members over the past two years, the bulk of which were from home delivery workers. In one case, a worker was so severely traumatised by a dog's attack on her as she delivered goods to a private address that she gave up her job.
	The case for change is clear and the range of public bodies and members of the public supporting the Bill is growing by the day. The Bill proposes to take the emphasis away from the breed and focus on the deed. Currently, all dogs classified under section 1 of the 1991 Act as belonging to a breed dedicated to fighting are subject to seizure by the police, but on many occasions they are seized only to be registered and handed back to the owners on the grounds that those dogs are responsibly owned and managed. This practice ties up valuable police resources and time, which could be put to better use in tackling the growing problem of so-called status dogs.
	The current law is not working. RSPCA inspectors, many police officers and local authority wardens are seeing many more different types of large powerful dogs on the streets, and section 1 of the 1991 Act has not had the desired result of preventing the four named types of dogs from becoming established in the UK. It has just not worked. It is the view of the RSPCA, the Dogs Trust and the Kennel Club that it really is time to change the Act in order to allow section 1 dogs to be exempted and added to the register without necessarily being seizedif it is the police's judgment that that is appropriate.
	As I mentioned earlier, the Bill will focus attention on the deed rather than the breed. It is the action of ownerswhat they encourage or allow their dogs to dothat is important, rather than the breed or type of dog involved. This measure in my Bill is designed to give the police discretion to act accordingly.
	It is time to take action. Support for these measures is widespread. Furthermore, the Scottish Parliament is legislating on the issue in the Control of Dogs (Scotland) Bill, which was introduced on Monday 22 June. It proposes that warning notices be issued to owners of dogs whose behaviour is deemed to be unacceptable. We should consider doing the same in England as part of a process beginning with education and ending, in the worst cases, with prosecution backed by the appropriate penalties.
	I understand that Northern Ireland is considering legislative change, as is the Welsh Assembly. England cannot afford to be left out. Its residents deserve the extra protection offered to their Welsh, Scottish and Irish neighbours, and the Bill provides the means to deliver it.
	 Question put and agreed to.
	 Ordered,
	That Ms Angela C. Smith, Michael Connarty, Norman Baker, Mr. Bob Laxton, Geraldine Smith, Mr. Ian Cawsey, Natascha Engel, Joan Ryan, Mr. Mike Hancock, Mr. Michael Clapham, Kelvin Hopkins and Miss Anne Begg present the Bill.
	Ms Angela C. Smith accordingly presented the Bill.
	 Bill read the First time; to be read a Second time on Friday 16 October and to be printed (Bill 128).

Parliamentary Standards Bill

[Relevant Documents:  Memorandum from the Audit Committees on the Parliamentary Standards Bill.  Copies are available in the Vote Office.  Seventh Report from the Justice Committee, Constitutional Reform and Renewal:  Parliamentary Standards Bill, HC 791.  Nineteenth Report from the Joint Committee on Human Rights, Legislative
	 Scrutiny: Parliamentary Standards Bill, HC 844. ]

[2nd Allocated Day]

Considered in Committee.

[Sir Michael Lord  in the Chair]

Clause 6
	  
	MPs' code of conduct

Michael Lord: We begin with amendment No. 63, with which it will be convenient to deal with new clause 4 and clause 6 stand part.

Patrick Cormack: On a point of order, Sir Michael. There has been a most extraordinary development since we met yesterday. The Justice Committee produced a report to the House this very morning in which it has recommended that clause 10 be not proceeded with. That was decided unanimously, and with a majority of Labour Members present. The Justice Secretary has already indicated that he will not proceed with clause 6, and I am sure that it would assist this Committee's deliberations considerably if he indicated now whether he is minded to accept the unanimous report of a Select Committee of the House.

The Second Deputy Chairman: As far as the Chair is concerned, our proceedings must simply follow the order that is set out before us. I am sure that if the Justice Secretary wishes to alter those arrangements or make any other interventions, he will do so in his own time.
	I understand that amendment No. 63 is not to be moved.
	 Question proposed, That the clause stand part of the Bill.

George Young: I am grateful to the Government for adding their name to my amendment proposing the deletion of clause 6. It seemed to me that the clause added absolutely nothing to the Bill, as the House already has a code of conduct that reflects the Nolan rules. It also posed a substantial risk in opening up to judicial review that which happens in the House. I am glad that the Government have recognised the force of the arguments against it, have heeded the wise counsel of the Clerk of the House, and have had second thoughts.
	There are many other issues that we hope to address later, so I will not detain the House any longer. I merely express my gratitude for the fact that common sense has prevailed, and the clause is now not to be part of the Bill.

William Cash: I am sure everyone will be relieved that the Government have shown such good sense. I congratulate my right hon. Friend the Member for North-West Hampshire (Sir George Young) on his amendment. If we are lucky enough, in terms of the timetable and in other respects, we shall deal later with new clauses 7 and 8, which will help to clarify issues relating to the application of article IX of the Bill of Rights 1689 and the supremacy of Parliament. However, I think that we can leave that debate until later.

Alan Duncan: We are, of course, pleased that the Government have decided to remove clause 6. However, we wish to make clear that that is not because we do not approve of the idea of a codeindeed, we already have onebut because, as the Clerk of the House made clear, the clause would have put us on a collision course with the courts.
	While I welcome what I expect the Secretary of State for Justice to tell us in a moment, this does rather take us back to the future. I will not rehearse all the arguments that were in my Second Reading speech, but I will say that if clause 6 had remained in the Bill, the legitimate concerns of constituents would have been replaced by the vexatious concerns of litigants.
	We are, however, disappointed that yesterday, having delighted us by saying that they would withdraw the clause, the Government brought it in again through the back door, in a slightly watered-down form, by changing all the language of clause 5 from the word rules to the word code. That, in our view, has introduced a new element of confusion. Before the amendments were passed, there was a welcome hint of clarity. The word code now refers only to financial interests. It is to some extent sub-divided in the language of clause 5, but, as with the use of the word standards, the Government have introduced that element of confusion, which could otherwise have been avoided.
	I think that the origin is, once again, interference by the Prime Minister. Page 8 and other parts of the document that he produced yesterday, Building Britain's Futureitself probably an inaccurate titlestate:
	We are introducing legislation to create an independent regulator for Parliamentary standards, and a tough, legally binding Code of Conduct for MPs.
	If we juxtapose the amended clause 5 and the soon-to-be absent clause 6 with what the Prime Minister has said about a legally binding code of conduct, and if we take what he has said at face value, we see that we may once again be heading for a justiciable code of conduct, which is exactly what the removal of clause 6 was designed to avoid.
	We are not clearI am convinced that there is still confusionabout whether that will create the problems surrounding justiciability that the Clerk of the House has already highlighted, but I am afraid that our pleasure at the removal of the clause has been tainted by our disappointment that many of its disadvantageous elements have crept into the Bill elsewhere.

Alistair Carmichael: As I said on Second Reading, it is good that the Secretary of State will remove clause 6, but when he rises to explain his reasoning for that, he might also explain his logic as to how it is consistent to remove clause 6 while retaining other provisions such as clause 10.

Jack Straw: I am grateful for recognition of the fact that I have sought to respond to proposals from all parts of the House to improve the Bill, and I shall continue to do that wherever I can.
	Let me say in response to the hon. Member for Rutland and Melton (Alan Duncan) that the provisions of clause 5 are completely different from those of clause 6, which we hope will be excised in its entirety in a few seconds. Clause 5 deals with the Independent Parliamentary Standards Authorityand, for sure, various statutory duties are imposed on that. The fact that what was previously referred to as financial rules is now defined as a code relating to finance is a rose by any other name in that it does not make any substantive difference. I think I can see a twinkle in the hon. Gentleman's eye as he understands that point.
	We will remove clause 6 because we have recognised the serious anxieties expressed, not least by the learned Clerk, and because, as the hon. Gentleman said, it could have encouraged litigious constituents. I might just add, however, that that prospect remains. It happens to be the case that I was the first Member of this House to be subject to legal action from a constituent who believed that they had been badly served by me. That happened at the end of the 2000-01 Session, and a resolution of the House was tabled on that. A completely inadvertent error was made, compounding one made by the local authority, in which the name of an innocent constituent who lived at No. 9 in a street was transposed to the address of a drug dealer against whom the constituent was complaining who lived at No. 11. The local authority transposed the two addresses. My very good member of staff did the same on the basis of the mistake by the local authority, and I was the subject of legal action. The House very kindly decided to indemnify me against the 33,000 that that mistake cost. That risk remains, but I have no wish to compound it.
	As we are discussing clause 6, I shall come on to deal with the point raised by the hon. Member for Orkney and Shetland (Mr. Carmichael) when we discuss clause 10. I see that an important amendment to it has been tabled by the right hon. Member for North-West Hampshire (Sir George Young) and my hon. Friend the Member for Middlesbrough (Sir Stuart Bell) to which I am very sympathetic, and I will make a further decision about it in the course of these proceedings. With that, I ask that clause 6 be excised from the Bill.
	 Question put and negatived.
	 Clause 6 accordingly disagreed to.

Clause 7
	  
	Investigations

Amendment made: 84, page 4, line 33, leave out 'financial interests rules' and insert
	'code of conduct relating to financial interests'. (Mr. Straw.)

George Young: I beg to move amendment 9, page 4, line 35, at end insert
	'(ab) at the request of the member,'.

The Second Deputy Chairman: With this it will be convenient to discuss the following:
	Amendment 10, page 4, line 42, at end insert
	'(4A) No report shall be made by the Commissioner
	(a) in any case where the member concerned has agreed that he has failed to register or declare an interest, if it is the Commissioner's opinion that the interest involved is minor, or the failure was inadvertent, and the member concerned has taken such action by way of rectification as the Commissioner may have required within any procedure approved by the IPSA for this purpose; and
	(b) in any case involving the MPs' allowance scheme, or the use of facilities or services, if the Commissioner has with the agreement of the member concerned referred the matter to the IPSA for the purpose of securing appropriate financial reimbursement, and the member has made such reimbursement within such period of time as the Commissioner considers reasonable.'.
	Amendment 11, page 5, line 5, at end insert
	'(5A) In determining the procedures, the IPSA must consult
	(a) the Leader of the House of Commons,
	(b) the Committee on Standards and Privileges, and
	(c) any other person the IPSA considers appropriate.'.
	Amendment 48, page 5, line 6, leave out subsection (6).
	Amendment 45, page 5, line 11, at end add
	'(7) The IPSA must ensure that any member who is subject of an investigation is provided with independent advice and counsel on all matters relevant to that investigation.'.
	New clause 5 Minimum requirements for fairness 
	'The procedures referred to in subsection (5) of section 7 must, in particular, provide a Member who is the subject of an investigation or complaint with
	(a) a prompt and clear statement of the precise allegations against the Member;
	(b) adequate opportunity to take legal advice and have legal assistance throughout;
	(c) the opportunity to be heard in person;
	(d) the opportunity to call relevant witnesses at the relevant time;
	(e) the opportunity to examine other witnesses;
	(f) the opportunity to attend meetings at which evidence is given, and to receive transcripts of evidence.'.
	New clause 11 Fairness: Minimum requirements 
	'The procedures referred to in subsection (5) of section 7 must, in particular, provide a Member who is the subject of an investigation or complaint with
	(a) a prompt and clear statement of the precise allegations against the Member;
	(b) adequate opportunity to take legal advice and have legal assistance throughout;
	(c) the opportunity to be heard in person;
	(d) the opportunity to call relevant witnesses at the relevant time;
	(e) the opportunity to examine other witnesses;
	(f) the opportunity to attend meetings at which evidence is given, and to receive transcripts of evidence;
	(g) the benefit of a standard of proof of beyond reasonable doubt where the allegation amounts to a criminal charge, and of the balance of probabilities in all other cases.'.
	Clause stand part.

George Young: As drafted, clause 7 does not provide an opportunity for Members to refer their own cases to the new Commissioner for Parliamentary Investigations. The Bill thus removes a facility that is currently available to Members and which has been used on several occasions in the past couple of years. Amendment 9 would restore that facility.
	I think it is right that there should be no automatic entitlement for Members to refer their own cases. Currently, the commissioner seeks the agreement of my Select Committee on Standards and Privileges before he proceeds with an investigation into a matter that has been self-referred. In my view, it would be appropriate for the procedures that will be drawn up under this clause to prescribe a similar process whereby a self-referral leads to an investigation only if IPSA gives its assent. For example, there may be allegations made about a Member which receive widespread publicity but nobody actually makes a complaint. The only way in which that Member can have his name cleared is to refer himself, currently to the Parliamentary Commissioner for Standards, go round the course and then, hopefully, be cleared. Amendment 9 would replicate that facility in the proposed new regime.
	Amendment 10 deals with a different point, but it is similar in that the purpose is again to restore a feature of the current system that will otherwise be lost, and which in the opinion of my Committee has worked well. I am referring to the rectification procedure. The amendment allows the new commissioner to rectify certain cases without making a formal report to IPSA. It closely replicates the language of Standing Order No. 150. Typically, cases suited to rectification involve the misuse of a few prepaid envelopes, or an inadvertent and relatively minor error in the content of a letter sent out using the communications allowance. Where the Member accepts that such a relatively minor error has been made and makes the appropriate restitution, the matter can be regarded as dealt with. I fear that if no provision of this kind is made, IPSA will find that it is kept very busy considering reports on relatively minor and inconsequential breaches of the rules.
	Subsection (4) states:
	After conducting an investigation, the Commissioner must make a report to the IPSA on the Commissioner's findings.
	If the reports are to be substantive they will, again, involve a lot of work about very little. It would be helpful if the Secretary of State could say something about how that unqualified requirement to report might work in practice.
	Finally in this group, amendment 11 would require IPSA to consult before it determined a set of procedures applying to the treatment of complaints, the conduct of investigations by the new commissioner and the publication of the commissioner's reports. The procedures will be of considerable importance to the House, and I am surprised that no provision for consultation was included in the Bill, especially as it very commendably includes consultation provisions in clauses 3, 5 and 11a fact that should make it easy for the Government to accept this amendment.
	I would have preferred the new commissioner rather than IPSA to be in the driving seat when it comes to drawing up the investigation procedures, and my failure to table an amendment to that effect is but one more symptom of the haste with which this Bill is being put through. I have, however, tabled such an amendment for Report, and it would be helpful if the Secretary of State could comment now on whether he will accept it.
	A further question arises on this clause: its relationship with clause 9. Given that all the alleged breaches of the rules that the commissioner may investigate under clause 7 will also be offences under subsections (1) or (2) of clause 9, do the Government expect the commissioner to be at all busy, because these will now be criminal offencesand is it not the case that all serious breaches will be handled by the police, leaving only relatively minor cases such as the misuse of prepaid envelopes and the inadvertent inclusion of a party logo in a letter funded by the communications allowance to be investigated by the commissioner? Therefore, what exactly will the work load be?
	Amendments 48 and 45 stand in the name of the hon. Member for Hendon (Mr. Dismore) and my hon. Friend the Member for North Essex (Mr. Jenkin) respectively, so I shall not comment on them. However, having successfully had a number of amendments adopted by the Government yesterday, I regard myself as being on something of a roll, and I hope that my good fortune may carry on to today.

Bernard Jenkin: I will not detain the House for long, and I apologise for not having been present at the beginning of our proceedingsalthough not so that I could have moved the amendment in my name in the previous group; I had no intention of wasting the House's time on that, given the Secretary of State's statement that he was withdrawing the clause concerned.
	My amendment in this group echoes the concern of my right hon. Friend the Member for North-West Hampshire (Sir George Young) that Members subject to the procedures of IPSA and the commissioner should be properly informed of what is going on and have proper advice.
	My particular concern relates to a personal experience, which I discussed in abstract terms with the Parliamentary Commissioner for Standards, so as to avoid lobbying him about a complaint that might arrive in his in-tray. I had found that I had inadvertently breached the rules, so I went to him to present him with a letter, which was, in effect, a self-referral. He said that he was minded not to accept it, but when I asked him what action he would take, he said that he would wait for a complaint. I then asked him what he would advise me to do, to which he said that he could not advise me, because he might receive a complaint and have to adjudicate on the case. I asked him which servant of the House of Commons could advise me on the matter, but he told me that nobody could. I then asked whether I should seek legal advicethat seems to relate to the import of my right hon. Friend's amendmentbut he said that his body discourages from people taking legal advice because it makes its proceedings so much more protracted.
	I have great sympathy with that view, and now that, between IPSA and the commissioner, we are having a separation between the management of rules, and the investigation of and adjudication on breaches, it should be simple for IPSA and/or the commissionerhere I link my amendment 45 with my amendment 46, which seeks to amend clause 8to ensure that a servant of IPSA or a Clerk in the service of the House, which means someone who does not cost the Member money and does not cost the House of Commons additional money, is made available to the Member who is subject to an investigation or to a direction by the commissioner under clause 8. There should be an informal way of ensuring that right hon. and hon. Members have access to independent advice without having to resort to expensive lawyers.
	That would be simple to arrange, and my two amendments seek to put those obligations on IPSA and the commissioner to ensure that that advice is afforded to Members without additional and unnecessary expense. That would avoid the situation wherein hon. Members are left completely isolated in a system that they are fighting. The accusations may be unjust or arise out of a misunderstanding, but we still ought to have a means of providing, in a fairly relaxed way, relatively informal advice. Obviously it remains open to a Member of Parliament to obtain formal legal advice if he or she so chooses, but I hope that my proposal would save right hon. and hon. Members a great deal of anxiety, while also giving comfort to IPSA and the commissioner that the Member was capable of dealing with the matter in an informed and practical way, and was not being left on his own or facing huge legal expenses.

Andrew Dismore: I shall speak to amendment 48 and new clauses 5 and 11, which I have tabled to give effect to recommendations made in the report of the Joint Committee on Human Rights. The Committee's concern was about the need to ensure that Members receive a fair hearing throughout this process. It is often said that human rights are all about unpopular causes and, as I said on Second Reading, there cannot be many more unpopular causes around at the moment than us. However, our unpopularity does not detract from the fact that even MPs are entitled to due process.
	The significant human rights issue raised by the Bill is whether it provides sufficient safeguardsI do not think that it doesto be compatible with Members' right to due process under both common law and article 6 of the European convention on human rights. The Government accept, in their explanatory notes, that the provisions in the Bill relating to the functions of IPSA may engage the right to a fair hearing under article 6, but they say that no incompatibility is involved. Their notes say that the reason for that is, first, that
	the direction or recommendation functions of the IPSA do not involve the determination of civil rights or obligations.
	They say that in this context we are talking about
	a matter of 'public law' rather than private law rights.
	The notes say that the second reason is because even if IPSA's functions do determine a Member's civil right, there is no incompatibility because
	there are a range of safeguards in place to ensure the fairness of the procedures of the IPSA.
	In addition, they say that
	an MP will have the opportunity to make representations.
	However, if we examine the Bill we see that such safeguards are almost non-existent. The only safeguards are those in clause 7(6), which are that a Member has a right
	to make representations to the Commissioner about the investigation
	and
	to make representations to the IPSA in light of the Commissioner's report.
	That is nowhere near enough.
	The right hon. Member for North-West Hampshire (Sir George Young), the Chair of the Standards and Privileges Committee, has admitted in evidence that he gave some time ago to the Committee on Standards in Public Life that even our existing procedures are not fully compliant with article 6. Yet the new procedures represent far less than we have at the moment before the Standards and Privileges Committee, and they are inadequate.
	My amendment 48 would delete clause 7(6) with a view to replacing it with something a little more fitting, because I believe, as my Committee states, that the
	Government's view that Article 6...does not apply to the disciplining of members is...not tenable in view of the very serious consequences that might result.
	We are talking about not only financial penalties, but expulsion or suspension from the House and, inevitably, the destruction of the Member's political career. We have seen what can happen to Members as a consequence of the revelations in  The Daily Telegraph and of previous recommendations of the Standards and Privileges Committee accepted by the House that have, in effect, meant that Members have had to decide to give up their seats at the next election as a result of what we have found out.
	There is little doubt that the proposed procedure relates to the determination of Members' rights. Sometimes the nature of the allegation will be such that the determination will be of a criminal chargewe have already seen some such cases before the Standards and Privileges Committee in which there has been a suggestion that a Member has acted fraudulently. Otherwise, the allegations will relate to the determination of a Member's civil rights, given the seriousness of the consequences for the Member concerned. These cases will always have serious consequences for Members' reputations, and may well affect their ability to pursue their livelihood. That view is reflected not only in my Committee's report, but in the previous report undertaken by the Joint Committee on Parliamentary Privilege and in the recommendations made by the Committee on Standards in Public Life.
	We are recommending a series of relatively straightforward matters that reflect contemporary standards of fairness. We propose the following, which are minimum requirements of fairness:
	(a) a prompt and clear statement of the...allegations against the Member;
	(b) adequate opportunity to take legal advice and have legal assistance throughout;
	(c) the opportunity to be heard in person;
	(d) the opportunity to call relevant witnesses...
	(e) the opportunity to examine other witnesses
	the Standards and Privileges Committee does not allow that last one at the momentand
	(f) the opportunity to attend meetings at which evidence is given.
	We also seek to ensure that the standard of proof to be applied reflects the nature of the charge. Thus, if the charge is so serious as to amount, in effect, to the determination of a criminal charge, it should be proved beyond all reasonable doubt, but for less serious charges the standard of proof should be the balance of probabilities. That is the basis on which the commissioner investigates a complaint and the Standards and Privileges Committee judges it now. The more serious the charge, the higher the standard that we will apply, as is only appropriate. I hope that the House will accept what I am saying about this issue.

Douglas Hogg: Is there not also merit in thinking about whether we should have some procedure for appeal, so that the finding could at least be reviewed as to its merits by some appellate authority?

Andrew Dismore: The right hon. and learned Gentleman anticipates my new clause 6, which will be discussed when we reach clause 10, and I entirely agree with what he says. New clause 11 is slightly fuller than new clause 5 because it also deals with the burden of proof. I understand that my right hon. Friend the Secretary of State is minded to accept, in principle, that I am on the right lines here, but I hope that when he replies he will make clear which of this shopping list of very basic procedural minimum requirements he does not agree with. He should do so if he wishes me not to pursue this matter, but to allow it to be dealt with in the other place. I cannot see which of my proposals anyone who is expecting a fair hearing could object to. If we are to consider turning our procedures to the outside world and having independent investigation, we should apply to ourselves the same standards as we would expect any other professional disciplinary body to apply in the outside world, be it one relating to doctors, lawyers or anybody else. We should not be treated any differently, fair standards of hearing are essential, and my proposals set out what those require.

Alan Beith: My name is attached to new clause 11 and I support it strongly for the reasons cogently adduced by the Chairman of the Joint Committee on Human Rights, the hon. Member for Hendon (Mr. Dismore). I rise at this point to refer to a more detailed aspect of clause 7, and in doing so I draw the attention of the Committee to the report on the Bill that the Justice Committee produced overnight, which deals with many of the clauses and includes the Clerk's memorandum, the Government's response to it and several academic notes on some of the issues.
	The issue that arises in clause 7(3) is who would decide on the reasonableness of the commissioner's requests, and whether a Member could seek judicial review of the commissioner's actions. If in the meantime the House had used its disciplinary powers to punish a Member for failing to provide information that subsequent judicial review demonstrated that the commissioner was acting unreasonably in seeking, we would be in difficulties, because that would open the door to judicial review of the decision by the House or the Standards and Privileges Committee on the matter. That may sound like a technical point, but it is potentially important, and the Clerk has drawn attention to it.
	The issues to which the Justice Committee wants to draw special attention arise mainly in clause 10, for which we recommend a route to achieve at least more measured reflection on all these aspects of privilege by setting them aside for the time being and concentrating on the parts of the Bill that set up the independent body so that it can carry out its central and essential function. In case the Government do not accept that wise advice, we will have to ensure as we go along that we do not build in the potential danger of undesirable judicial review of the proceedings of the House.

Douglas Hogg: I can well understand that it may be necessary to require discovery of documents, but as clause 7(3) is drafted, it would enable a Member to be required to produce any information, and that raises issues of self-incrimination. Perhaps we should look carefully at the clause to see whether it can be tightened to apply only to the disclosure of appropriate documents, and does not require Members to incriminate themselves.

Alan Beith: That is a sensible point and further illustrates the need for much more measured and careful consideration of some of these clauses than the procedures that we are now following allow. If we cannot reach sensible conclusions about them under this process, we should set them aside and consider them later, while concentrating on matters that can be dealt with immediately.

David Heathcoat-Amory: I support these amendments, especially those tabled by my right hon. Friend the Member for North-West Hampshire (Sir George Young). I hope that he will continue his remarkable run of getting his amendments accepted. In particular, I support what he said about the lack of proportion in the gravity of the offences to be investigated. We are all aware that there is no de minimis rule in the Bill, although inadvertent and trivial breaches may occur, through genuine mistakes, that could easily be put right.

Patrick Cormack: Does my right hon. Friend agree that, because of the timetable, we did not debate, and therefore do not have, a sunset clause?

David Heathcoat-Amory: My hon. Friend is right, and it is a scandal that we did not even discuss such a vital protection yesterday. The theme running through the whole of these proceedings is that there is no case for treating this Bill as an emergency. It is a complete abuse of how we conduct proceedings that we have been asked to sign up to matters affecting the rights, immunities and privileges of this Houseand, more widely, of the people whom we representwithout discussing important clauses at all.
	I am especially concerned by the lack of proportionality in these clauses. As I understand itif I am wrong, I trust that the Justice Secretary will correct methe same rules will apply to trivial or inadvertent offences. Many such offences will be referred to the commissioner as part of the party political contests in each constituency. Many people are itching to refer to the new commissioner matters that may be important locally but which, in the great scheme of things, are oversights that could be easily corrected. The commissioner will have to investigate all such matters, in order to decide whether they are unimportant or trivial, and will then have no option but to make a report to IPSA on his findings, under clause 7(4). The very fact of making any inquiryeven if the conclusion is that no action need be takenmust lead to a report. That will be immensely bureaucratic, and it is likely that in the intervening weeks the Member's local paper will highlight the fact that he or she is under investigation by the commissioner. It is very important that we now try to assess what the commissioner will have to do, and to relieve him of the burden of having to make an investigation and report on unimportant matters.
	My second point confirms that made by the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) about the possible role of the courts in this matter. Serious offences will of course be subject to the criminal law on fraud, theft and false accounting. In addition, and unnecessarily, we will also import some more criminal offences into the Bill. I am especially concerned by the word reasonably in clause 7(3). It could be judiciableit will, after all, appear in statute law. I can imagine a case in which the commissioner gets into a dispute with a Member under investigationfor what may well be a serious matterwho resists having to disclose personal tax records. The commissioner may demand those records, on the grounds that that is the only way in which the evidence can be found for income received that should have been disclosed. Or the financial disclosure requirements could require the production of names and addresses of professional clients or customers, in the case of a business. The Member concerned may consider, reasonably, that that would be improper and that he owes a duty of confidentiality to his customers or clients. So there may be a genuine dispute between a Member and the commissioneran external person, appointed by the Crown and therefore with no particular duty to or affection for the House, and driven by public opinion. The Member concerned may feel that he is on the receiving end of unfair inquiries.
	As I understand it, such a dispute would be judiciable, and therefore the court would have to decide what was reasonable. In that case, the court would be interfering in matters that should remain within the purview of the House.

Douglas Hogg: It is not only as my right hon. Friend understands the point, but as the Clerk understands it. In his evidence to the Justice Committee, the Clerk made exactly that point.

David Heathcoat-Amory: I am grateful to my right hon. and learned Friend for pointing that out. I think that that gives it additional weight and authority, and we should all be concerned when a servant of this House raises such points. The Clerk cannot make a speech; he relies on us to reflect his concerns, which is what we are doing.
	It is a regrettable fact that the courts might be required to make a judgment on what is essentially a dispute between the House and the commissioner, with unpredictable consequences. If I understood the right hon. Member for Berwick-upon-Tweed correctly, if the House decided to discipline the Member concerned and it was subsequently found that the information was demanded unreasonably, the court would be interfering directly in the disciplinary matters of this House. If there is something on which we all agree, it is the fact that the House must retain the ultimate sanction to discipline its own Members. If I am wrong about that [ Interruption. ] No, I think that the Justice Secretary is agreeing with me. Will he explain, then, how that sanction is not put at risk if a court can declare that disciplinary action by the House is unreasonable because the commissioner had been unreasonable in the requiring certain information from a Member under investigation?

Alistair Carmichael: I, too, shall endeavour not to detain the Committee overlong. We have before us a range of amendments. The amendments tabled by the right hon. Member for North-West Hampshire (Sir George Young) seem, as others have said, sensible and workable. They represent an improvement to the mechanism of the Bill and I hope that the roll that the right hon. Gentleman is on will continue.
	I was impressed by some of what the hon. Member for North Essex (Mr. Jenkin) said about the availability of informal legal adviceI think that that was the way that he put it. Experience teaches me, however, that legal advice is never informal. One either gets legal advice or one does not. It seems to me that his suggestion, superficially attractive though it is, is a parliamentary equivalent of the legal aid duty solicitor scheme. For many years, I trawled around the police cells of the north and north-east of Scotland as part of that admirable scheme, and although I find the proposal not unattractive, even a legal aid duty solicitor has a direct lawyer-client relationship from which there can be no departure. The standard of service and care, as well as the duty of care, that is owed by the legal aid duty solicitor to the client in the cells is exactly the same as that which would be owed by any City solicitor to a blue-chip client.

Bernard Jenkin: I did not say informal legal advice, but advice. In fact, my amendment referred to advice and counsel. Let us suppose a Clerk of the House was allocated the duty of advising Members who were the subject of complaints, or of advising Members on how to conduct themselves if they believe that they have broken the rules. It seems quite reasonable that an hon. Member should have someone in the House to turn to. They might well say, Well, in your circumstances you should go and get legal advice, but we should avoid somebody's having to take that step initially as it might be quite a low-level complaint. There should be some way of dealing with low-level complaints without resorting to lawyers.

Alistair Carmichael: I take the hon. Gentleman's point and I do not want to labour it because I do not know whether he will seek to press his amendment to a Division. There is certainly merit in the notion, but my concern is that once we come to the practicalities of how to make this work, the advice provided will effectively be legal advice. It would be a brave Clerk who would advise a Member not to take legal advice in those circumstances.

Douglas Hogg: Although one might argue about the legalities, surely the proper position is to say that the hon. Member should have an opportunity to take legal advice. It would be for the hon. Member to determine where he got that advice from and how he paid for it, but he should have an opportunity to take legal advice and to be represented by that adviser if he so chooses. Surely that is a requirement of natural justice.

Alistair Carmichael: That is one of the most basic norms of natural justice, and once we go down the route that the Government are taking us down with this clause, that is the inevitable consequence.
	That point brings me to new clause 11, tabled by the hon. Member for Hendon (Mr. Dismore). I thought that my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) succinctly and cogently showed why I would also support the new clause. It is a basic statement of best practice and I do not see what part of it could be objected to. I, too, will listen to the Secretary of State when he responds on that point.
	Let me return to the practicalities of all this. The hon. Member for Hendon has tabled a new clause that will rebalance the rights and obligations under the Bill in a way that is very necessary. However, if we go down that track, what is there by way of effective investigation? It is in the nature of investigation that we do not always know what we are looking for when we start. Although much of what we have here provides necessary protection for the rights of the person being investigated, as consequences could subsequently flow to him, will we have an inquisitorial process that achieves the objective that we aim it to have at this stage?

Andrew Dismore: Under the existing arrangements between the commissioner and the Standards and Privileges Committee, there is an obligation on a Member to co-operate with the inquiry. Co-operating with the inquiry does not preclude a Member's having the benefits of due process.

Alistair Carmichael: It is a question of checks and balances. The system at the moment is reasonably well balanced because the consequences that can flow from an investigation are that much more restrictive. It is clear from the Bill, and from clause 9 in particular, that a lot more could follow by way of consequences in the future. That is where the inquisitorial element, I fear, could become deficient at the end of the day. The hon. Gentleman's amendments are good, well founded and necessary. However, I fear that as a consequence of the effectiveness of the Bill as a whole, we will be left with a system that will not work as well as it ought to. That is the consequence of the Government's having proceeded in the way in which they have. They persist in that, notwithstanding the evidence that has come from the Joint Committee on Human Rights, chaired by the hon. Member for Hendon, and the Justice Committee, chaired by my right hon. Friend the Member for Berwick-upon-Tweed.

Mark Durkan: The right hon. Member for North-West Hampshire (Sir George Young) expressed the wish that his roll would continue. I want to back that wish in respect of amendments 9, 10 and 11.
	I am of an age where in my Church we still said the old-fashioned confiteor, with Mea culpa, mea culpa, mea maxima culpaThrough my fault, through my own fault, through my own most grievous fault. Clearly, we have to ensure that the system can allow for occasions where Members spot some discrepancy or indiscretion in relation to returns, claims, mistakes that were made by their office or the inadvertent misplacement of claims. When they identify them, they need to be able to have them corrected properly without being told, as the hon. Member for North Essex (Mr. Jenkin) said, that although they have corrected the error themselves, they still have to await the peril or jeopardy of a complaint or to be subject to some wider observation. Self-correction must be able to be taken and we need to ensure that the system recognises the difference between venial sins and sins of omission and the mortal sins and more serious sins of commission. I believe that the amendments go some way towards doing that.
	Many of us have been looking at various claims and other things, and I found myself listed among those who had made repayments in the recent context. I refused an offer of a new mobile phone from O2, and was then told that I would get 200. I thought that that would be credit on my mobile phone bill, but instead I got a cheque for that amount as cashback. Normally, I claim most bills for the phone on expenses, so I said that the cashback should go back to that source of payment, which is the House of Commons. The 200 payment was not in respect of any specific claim, or any claim that was wrong or undue, but it constituted a repayment in the context of everything else that was happening.
	Clearly, hon. Members must be allowed to make sensible and proper judgments without finding themselves with some sort of criminal record. We are doing something that is on a par with tidying up The Highway Code, and it should not end up with people being investigated as though they were involved in some sort of federal case.
	I have some sympathy with the situation that the hon. Member for North Essex (Mr. Jenkin) found himself in. He was caught in a conundrum but, for the reasons put forward by the hon. Member for Orkney and Shetland (Mr. Carmichael), I am wary of creating a system that means that everything could automatically be the subject of legal advice. People may feel compelled to seek that advice, but the fact that such advice was being sought could also became a matter of record and freedom of information.
	The way that the hon. Member for Hendon (Mr. Dismore) presented new clauses 5 and 11 made them sound reasonable and compelling, but again I have some concern that investigations could turn into hearings. We must not let the process grow beyond its limits, and I believe that the test will be how we strike that balance.

Patrick Cormack: rose

Dominic Grieve: rose

Michael Lord: Mr. Dominic Grieve.

Dominic Grieve: This has been an interesting debate, and I hope that the Secretary of State will be able to respond positively to the points that have been raised.

Patrick Cormack: Some of us want to take part in it.

The Second Deputy Chairman: Order. Let me make it clear that there is no reason why hon. Members may not take part. Those hon. Members who stand are called to speak in the way that the Chair thinks appropriate. Mr. Dominic Grieve.

Dominic Grieve: Thank you, Sir Michael. I hope that the Secretary of State will be able to respond positively. It is clear that clause 7 moves us towards a much more structured system of investigation than we have at present. Whether or not the current investigation regime falls within what we like to call parliamentary privilege, it certainly happens in-House. I am the first to accept that much of what will be investigated probably will not concern parliamentary privilege in any way at all, and that is why investigating whether an MP has misclaimed or overclaimed is of very little consequence to the wider constitutional framework of this country.
	However, if we move down this road, it is important that we acknowledge that we will have to look very carefully at the fairness of the system that we introduce. It will come in for more scrutiny, and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) was right to say that it will be justiciablethat is, anyone unhappy with any aspect of the proceedings will be able to seek judicial review.
	In that context, the amendments put forward by my right hon. Friend the Member for North-West Hampshire (Sir George Young) are extremely sensible. They would allow people to self-refer, but the most telling proposal is for a system that would allow very minor matters to be handled without a report having to be made.
	One problem that we will face was touched on by the hon. Member for Foyle (Mark Durkan). In a sense, Members of Parliament are sole practitioners, and we handle offices and budgets that are quite substantial. Also, I suspect that most Members of Parliament work rather longer hours than the average, and that the administration of our offices is not the thing that we do best. Our capacity for making mistakes is very great.
	When our documents going back to 2004 were published, I looked through them and found that it was not difficult to pick out examples of things that might have been done differently. Perfectly reasonably, most of us tend to sign off on things presented to us by members of staff. Keeping our office expenses under proper scrutiny is not what we are likely to do best.
	We need a system that recognises the importance of self-regulation. People must be able to own up quickly to making mistakes without the fear that they will be dumped on and dragged through the mud. Also, we need a system that can reflect the de minimis rule: that is, we must ensure that people do not have to go through convoluted procedures for absolutely minimal mistakes. Those points are dealt with by amendment 10, which I consider to be extremely sensible.
	The hon. Member for Hendon (Mr. Dismore) introduced new clause 11, which is a substantial improvement on what we have at present. I do not know whether he is minded to press it to the vote, and I appreciate that it may be possible to do something about the proceedings when the Bill comes up for further consideration elsewhere. My judgment, however, is that new clause 11 is a substantial improvement, and my concern is that not putting a similar provision in the Bill will lead, because of justiciability, to a decision by the commissioner being overruled or overturned.
	I also have great concerns about the potential impact of the procedures on disciplinary decisions. Such decisions may be found to be in conflict with decisions taken by the commissioner that are subsequently reviewed and found to be wanting. I shall say more about this in connection with clause 8, but I do not think that the House can lightly ignore the problem.
	Yesterday, we discussed at considerable length questions of where Parliament's rights will be intruded on. The problem is not so great with clause 7, but the fact is that the clauses cannot be looked at in isolation. I make this point because the Secretary of State may wish to respond now as well as later, but the linkage between investigations, enforcement and offences must be looked at as a whole.
	I have the most serious concerns about what we are doing. If we confine the commissioner's activities to looking at our expenses and salaries, there will be no great difficulty, and that was exemplified in the evidence given yesterday by the Clerk of the House to the Justice Committee. However, conflicts will start to arise once we stray outside of that, and the potential will grow for the courts to intrude into the House's affairs in ways that touch on our constitutional responsibilities. I hope that the Secretary of State will be open-minded nowI suspect that he will be, as it has been hinted that he may accept some of the amendmentsand that he will also bear what I have said in mind when we consider later amendments.
	Finally, my hon. Friend the Member for North Essex (Mr. Jenkin) has also tabled some amendments that highlight areas of anxiety in exactly the same way. I hope that the Secretary of State will be able to provide some reassurance that those problems will be addressed. It may be that they can be addressed now, but they could also be dealt with by looking at the matter in its totality. We need a proper set of rules to govern investigation and inquiry, and those rules should also cover hon. Members' ability to get proper advice as an investigation proceeds.

Patrick Cormack: I shall be brief, but there are two points that I would like to put to the House. Parliaments tend to get known by particular names. The other week in the Chamber, the hon. Member for Cannock Chase (Dr. Wright) talked about how this Parliament would come to be known in the future. I fear that it may go down as the tarnished or tainted Parliament. Among those of us who have sat in this Chamber in the past few weeks, it will certainly go down as the depressed Parliament. I look forward to the next Parliament and hope that its Members can perform their duties untrammelled, both here and in their constituencies.
	However, we must have regard to one overriding fact in that context. The new Parliament, no matter who decides to go or stay, will contain many new Members. Some papers calculate that half the new Parliament could be composed of Members who have never sat here before. However many new Members there are, it will be a lot. Those new Members will come here, as we all did at one stage, somewhat overwhelmed by the honour of being here, I trust, and somewhat perplexed by the rules of our procedures, which we all have to try to learn. There will be a new dimension, too, provided by the Bill, which the House is rushing through this week. It worries me very much that that new Parliament could come to be known as the frightened Parliament, or the blighted Parliament.
	Just think of the enormous scope that there will be for vexatious and frivolous complaints, yet according to the Bill, every one of those complaints will have to be investigated. My right hon. Friend the Member for North-West Hampshire (Sir George Young) made an excellent speech when he moved amendment 9. He referred to the fact that when a Member is under investigation, he or she is under a cloud until it is completed. We all know from our constituencies that if we read that somebody has been arrested on a particular charge, a question mark automatically flashes up in our minds about the integrity of that person, even though we all subscribe to innocent until proven guilty. How dreadful it would be if 50 or 60the number could even run to three figuresnew colleagues in a new Parliament were subject to some form of orchestrated complaint, or to a series of complaints. That is quite possible.
	I was very impressed by the speech of my friend, the hon. Member for Foyle (Mark Durkan), who talked about his payback. Just think of the deterrent to saying Mea culpa. A Member may say, Oh, good gracious me. I didn't look sufficiently carefully at that, and now I have signed it off and all those letters have gone out. Let's be quiet about it. Members could be frightened, their careers could be blighted, and they could feel deeply self-conscious. All those factors will make it less easy for them to be effective Members of Parliament.
	When we finish considering the Bill todayI deplore the fact that we are dealing with it in such hastewe must bear in mind that we are agreeing a piece of legislation that will not particularly impinge on many Members in the House at the moment. By the time that it is fully in force, it will probably be the turn of the year; the Justice Secretary made that point. However, by May or June next year, there will be a new Parliament. If the Act, as it will then be, hangs above that Parliament like the sword of Damocles, just think of the effect that that could have. I therefore beg the Secretary of State to accept the amendmentsor, at the very least, their spiritand to try to inject into the Bill a note of discernment and discrimination between the trivial and the serious. If he does not, we will pass an Act that will have a very bad effect on the next Parliament.

Douglas Hogg: I just want to say a brief word about amendment 10 and new clause 11. I am a strong supporter of amendment 10, which was moved by my right hon. Friend the Member for North-West Hampshire (Sir George Young), for the reasons that were advanced by my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack). It is entirely right to say that individual Members could face vexatious complaints, and that would be very bad because it would put the hon. Member in question under a serious cloud and inhibit him or her in the performance of his or her duties.
	One cannot exclude the possibility of co-ordinated and coherent campaigns against individual Members, in which vexatious complaints are made. The amendment put forward by my right hon. Friend addresses that, in part, by providing for the hon. Member in question to make a repayment, if the sum involved is modest and if there has been an oversight. The amendment would guard against errors of a de minimis kind. I think that the Justice Secretary is saying that he is minded to accept the amendment. If he does not, let us hope that he will accept the spirit of what my right hon. Friend is doing.
	I note that new clause 11, which was tabled by the hon. Member for Hendon (Mr. Dismore), has the support of the Joint Committee on Human Rights, because the amendment is drawn from the text of the Committee's report. It also has the support of the Committee on Standards in Public Life. Those are two all-party committees of considerable authority, and the fact that they are both signed up to the new clause seems to be of considerable importance. As the hon. Gentleman said, the commissioner's report could have dire consequences for the future of any right hon. or hon. Member affected by that report. That is even more true of the IPSA report. It is therefore important that the House should try to ensure that the process is conducted in accordance with the rules of natural justice. The hon. Gentleman's new clause ensures that that happens.
	I have only one proviso to make. The process has two stagesat least, it does at the moment, but there may be more later. The first stage is the investigation by the commissioner, leading to a report to IPSA. IPSA is then obliged to enable the right hon. or hon. Member to make representations, so there is a second stage. I am not entirely clearthis is a matter for further considerationabout whether all the protection afforded by new clause 11 should apply to both stages or one stage. That is a matter on which there needs to be some reflection. My feeling, at this stage, is that the full panoply of the protections should apply to the hearing of the representations by IPSA, and that there should be a lesser stage of protection relating to the inquiry undertaken by the commissioner. The commissioner should be obliged to accord quite a lot of protection to the hon. Member concerned, but not the full panoply that is contemplated in new clause 11. That full panoply should be confined to the IPSA hearing.

Andrew Dismore: If the right hon. and learned Gentleman looks at the construction of new clause 11, he will see that it does exactly what he suggests; it is confined to the IPSA procedure by a cross-reference to clause 7(5).

Douglas Hogg: I had not fully understood that. I am grateful to the hon. Gentleman for making that plain, because the full panoply is probably best directed at the IPSA hearing, rather than at the preliminary hearing.

Jack Straw: Like many of these debates, this has been an interesting one. I shall deal with the amendments by grouping them together.
	First, I accept amendment 9, which was tabled by the right hon. Member for North-West Hampshire (Sir George Young) and my hon. Friend the Member for Middlesbrough (Sir Stuart Bell), as it is entirely right to add it to the Bill. I accept amendment 11, too, and there should be no argument about that. I shall also accept amendment 10, but I want to add a gloss. Sometimes one has reservations about amendments, although one accepts their overall principle. If there are questions about their drafting or their full impact, one might ask the Member who tabled them to withdraw them and wait for the matter to return at a later stage.
	On amendment 10, I accept entirely the argument made by the right hon. Member for North-West Hampshire that the cases captured by proposed paragraphs (a) and (b) will be relatively trivial and so on, so it would be ridiculous to have the full panoply of a report to the authority without any discretion in the hands of the commissioner. I am therefore going to accept the amendment, but I reserve the rightof course, it will be a matter for the House and the other placeto submit a revised drafting. I will consult the right hon. Gentleman about this, but if a member of the publicand we are not talking about vexatious complaints; if they are vexatious, hopefully they can be dismissed at an early stagemakes a genuine complaint it is important that even if there is no formal report by the commissioner, they are told what has happened. We must check that that is the case.
	I am thinking of myself, too, because I was the subject of a complaint to the commissioner, which would receive consideration by IPSA, and a complaint was made in respect of a separate matter to the Electoral Commission. It made a difference to me to be able to spell out the conclusion, which was that I could continue to be a Member of Parliament. The most recent complaint was about my repetition of an entirely inadvertent error by my constituency party treasurer, who received a donation that he misrecorded, without misleading anybodyit was from one of two companies owned by the same personand I repeated the error, because I obtained the information from him. How else could I have obtained it? The newspapers made quite a lot of the fact that I had been referred to the Electoral Commission by a Member of the House, and it took a bit of work to get them to accept that there was a further story, and that I had been cleared by the Electoral Commission. We must bear that in mind.
	I hope that that deals with those amendments satisfactorily. The right hon. Member for North-West Hampshire and my hon. Friend the Member for Middlesbrough have continued their clean sweepevery one a winnerso I shall now turn to the other amendments. The hon. Member for North Essex (Mr. Jenkin) tabled amendment 45, which states:
	The IPSA must ensure that any member who is subject of an investigation is provided with independent advice and counsel on all matters relevant to that investigation.
	It is important that we do not over-egg the pudding and seek to provide ourselvesand the implication is that this would be provided freewith something that is not available to others in similar circumstances. The availability of civil legal aid has been restricted for a long time. Although the costs of such aid continue to rise, eligibility, particularly outside the area of family law, is restricted.  [ Interruption. ] The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) is confirming that that is the case. Civil legal aid is also subject to means-testing, and it would be improper of the House to establish by means of a single amendmentI know that the hon. Member for North Essex does not intend thisa Rolls-Royce of a legal aid scheme for ourselves that is not available to others.
	We all have constituents in that situationI have one at the momentwho are subject to a process by their employer that could lead to dismissal and be reputationally terminal. They do not receive legal aid, although they may receive legal assistance from their trade union, so we must bear that in mind in relation to the question of fairness.

Bernard Jenkin: As the right hon. Gentleman rightly said, I do not intend that the Exchequer should end up providing legal aid to Members of Parliament. I am talking about practical, reasonably expert advice that might result in a Clerk of the House saying, Go and get a lawyer. You're in trouble. Before reaching that stage, there should be provision for some advice. If I may say so, the exception for Members of Parliament is justified in this case, given that we are creating offences that apply only to Members of Parliament, who are particularly vulnerable to attack from members of the public who may have grudges against us for some peculiar reason.

Jack Straw: We will come on to the offences later, but it is fair to point out that the House has been ready to impose similar offences on other bodies.  [ Interruption. ] The hon. and learned Member for Beaconsfield (Mr. Grieve) is mouthing derogatory comments about the provision of those offences, but when the Scotland Act 1998 was before Parliament I do not recall any adverse comments from the Conservatives.

Bernard Jenkin: It was not timetabled.

Jack Straw: Some of the parallels are with the Local Government and Housing Act 1989, and my recollection is that that measure was timetabled too, or subject to a guillotine.

Dominic Grieve: I remember the generality of discussions on the Scotland Act, but I certainly would not be able to recall exactly what I said in the course of that debate. The Secretary of State must accept that since I have been in the House I have said pretty consistently that the tendency of the House, and particularly the Government, to impose new criminal sanctionsI think that more than 3,000 have been created since 1997, mostly of a regulatory natureappears to have done nothing to benefit our country whatsoever, and is a habit that we would do well to cease.

Jack Straw: We try not to have criminal offences unless they are necessary. The hon. and learned Gentleman makes a nice rhetorical point, but when one goes into the detail of those offences, one discovers far less enthusiasm for removing them from the statute book. I have had a lot of correspondence from the leader of the Liberal Democrats, who has waxed eloquent on those 3,000 offences. I have asked him to name which of them he would repeal, were he ever in a position to do so. We have got it down to two out of 3,000. I also set that homework to the hon. and learned Gentleman. I accept that Members will need advice, but provision does not necessarily need to be made in the Bill. They ought to receive adviceindeed, advice is availablehere, but I will certainly take the proposal away and think about it. I promise the hon. Member for North Essex that I will do so.
	I come now to amendment 48 and new clauses 5 and 11. It is probably sensible to look at the more comprehensive new clause 11 first. No one can argue with the fact that the methods adopted by the commissioner and the authority's proceedings have to be fair. Clause 7(6) seeks to capture that injunction, and I am grateful to my hon. Friend the Member for Hendon (Mr. Dismore) and his Committee for their further, rapid consideration of the matter. However, there are some issues that we need to think about. I invite my hon. Friend to accept that we do not have a vote on the matter, and I in turn will accept that what is in subsection (6) will need to be added to, though perhaps not in the detail he proposes. There is one point that I need to raise in respect of subsection (g), which is the standard of proof, but I accept that there should be greater clarity about the rights of those who are subject to a report by the commissioner.
	Let me pick up the points made by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), the name of whose constituency has changed with extraordinary rapidity, although I dare say the boundaries have almost always stayed more or less the same. He arguedI paraphrasethat the commissioner carries out a preliminary investigation, which must of course be fair. Now that we have accepted amendment 10, the commissioner, if he so judges, makes a report to the authority. Plainly, less elaborate processes can apply in respect of that initial consideration by the commissioner.
	I emphasise the point that, paradoxically, the overall process that we are providing under the Bill is more substantial and provides more inbuilt protections for Members [Interruption.] Yes, it does, I say to my hon. Friend the Member for Hendonthan the existing process. Why? Because there will be a complaint, whether it is a self-referral or an external complaint, to the commissioner and an investigation by the commissioner. The commissioner then produces a report, which goes to the authority. We are making extensive provision for an arm's length relationship between the authority and the commissioner.
	The authority considers the matter and can make a finding. The finding is either, under clause 8(1), which we shall come on to deal with in more detail, to require the Member to make a payment or to correct an omission or an inaccuracy in the register, and/or to recommend to the House of Commons Standards and Privileges Committee the exercise of its disciplinary powers. When the matter goes to the Committee, the normal rights of Members before the Standards and Privileges Committee, and from there to the Floor of the House, apply. Although under our current proposals the authority may recommend that a Member be suspended or expelled, the decision on that or a further recommendation is for the Standards and Privileges Committee and then for the Floor of the House.

Andrew Dismore: My right hon. Friend is outlining a series of steps, of which there is one more than we have now, in practice. At present the commissioner reports to the Standards and Privileges Committee, and we report to the House. Under the Bill, the commissioner reports to IPSA, the Standards and Privileges Committee and the House. An extra stage does not mean extra fairness; it simply means an extra stage in the process. My question to my right hon. Friend is the one that I asked earlier: which of the elements (a) to (g) does he disagree with in principle as part of the IPSA process?

Jack Straw: The one that I am particularly concerned about is that related to the standard of proof, (g). We need to think very carefully about that. This is about a recommendation by the authority, not about the determination by the Standards and Privileges Committee. I am not an employment lawyer, as I think my hon. Friend was. I want to think about the matter. I also want the opportunity to go through the drafting of the new clause in more detail. That is not in the least a complaint to my hon. Friend. It is a recognition that we are proceeding with some rapidity. His report came out yesterday and we need to think about the matter.

Dominic Grieve: Two thingsfirst, the Secretary of State says he needs to think about the report. We need to think about it as well, but the trouble is that our consideration of the Bill will all be finished at 7 o'clock this evening. Secondly, I would have more sympathy with his concern about having a criminal standard of proofthe point raised by the hon. Member for Hendon (Mr. Dismore)if it were not for the fact that the system of investigation, when linked to clauses 8 and 9, is a seamless line potentially moving towards a criminal prosecution.
	Because the Government have set up the structure in that way, andI come back to this pointgiven powers to the commissioner of a kind that I do not believe he needs to do his job properly and make sure that our allowances are properly given to us, we will be ratcheted into much higher standards of proof. If this is the model that the Government insist on adopting, which I wish they would not, the line taken by the hon. Member for Hendon will have to be followed.

Jack Straw: I want to remind the House of this, and it is fundamental: it is astonishing how quickly the focus of a debate and of concern in the House can move, but there is a public outside that remains highly sceptical, as well as cynical, about the way we have operated our affairs up to now. We must bear that in mind all the time. One of the major problems that has been faced in this terrible expenses scandal is that no one outside the House accepted the legitimacy of decisions made by the Fees Office or any other part of the House about whether an expenses claim was or was not acceptable. That is why there must be an external adjudication of such decisions.
	The hon. and learned Gentleman seems to want it both ways. Of course we must get it right, but if there is to be an external authority, it must be able to come to some decisions, in a parallel way to decisions that would be made by similar bodies with similar tasks external to a particular profession and so on, not with lesser rights to the individual, nor with more. We need to end up with a situation where, if there were misconductnot inadvertence, error or light negligence, but misconductby a Member, that could lead to a criminal prosecution and/or discipline in the House, and equally, where there is an allegation against a Member, but that allegation falls to be dismissed by the authorityor subsequently by the Standards and Privileges Committee, but let us leave it at the authoritythat is accepted as having authority behind it.
	I understand the point that my hon. Friend makes, which we will consider. We will respond in the other place. This evening will not be the end of proceedings on the Bill. It will go to the other place and come back here. One of the serious concerns that I have about a raft of amendments that have been tablednot, I may say, by the right hon. Member for North-West Hampshire (Sir George Young)is that their overall effect is to emasculate and undermine the basic purpose of the Bill, which was accepted by Members on all sides and all three party leaders.

Mark Durkan: The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) hit on a very serious point when he asked whether new clause 11 would end up applying both to the investigation stage and then to the adjudication stage by the authority. The hon. Member for Hendon (Mr. Dismore) clarified that it would apply only to the authority stage because it refers specifically to subsection (5). But let us remember that subsection (5) states:
	The IPSA must determine
	(a) procedures in relation to investigations under subsection (1);
	(b) procedures in relation to complaints under subsection (2)(c);
	(c) procedures in relation to the circumstances in which a report under subsection (4) is to be published.
	So IPSA clearly applies to two stages in relation to the investigation, and proposed new paragraphs (a) to (g) of subsection (5) would apply separately in relation to the procedures, because new clause 11 begins with:
	The procedures referred to in subsection (5).
	So three sets of procedures are referred to, and they could apply three times, but that still does not deal with what we were assured the provision was meant to deal with: how the authority would approach the matter on receiving the report and the findings. Clearly, something needs to be remedied and clarified if we are to get the measure right.

Jack Straw: I am extremely grateful to my hon. Friend, who made the point better than I did.

Andrew Dismore: I accept that new clause 11, in relation to where it fits in the jigsaw of the process, might need tidying up. That is a fair point, but I am more concerned about the principle of the requirement for a fair hearing, and my right hon. Friend still has not said whether he objects in principle to proposed new paragraphs (a) to (f) as far as IPSA is concerned. They are the minimum requirements of natural justice and of article 6.
	My right hon. Friend expressed his reservations about proposed new paragraph (g), but it provides for exactly what the Commissioner for Standards and Privileges does now. If my right hon. Friend says that the Bill takes nothing away from the rights of Members, he has nothing to fear from proposed new paragraph (g), because the commissioner applies a much higher standard in the most serious cases than he does in the more trivial ones, and so he should, because that is the requirement of article 6.

Jack Straw: I have made my point in response to my hon. Friend, and I am glad that he accepts that his new clause will require some substantial revision, or what he calls tidying up. But we do not dispute the basic purport of the new clause.

Elfyn Llwyd: I rise to support fully the hon. Member for Hendon (Mr. Dismore). There is currently a difference between the standard of proof in a very serious offence and the other end of the scale, and the new clause's instruction to IPSA would be a good thing, not a bad thing. It would not emasculate the Bill; it would put more meat on the bone.

Jack Straw: In the interests of progress, Sir Michael, I think I have made the points I have made. I commend to the House the amendments that I suggest that we accept, and I hope that, on those amendments that we cannot accept, the invitations that I have made to hon. Members will prove acceptable.
	 Amendment 9 agreed to.
	 Amendments made: 10, page 4, line 42, at end insert
	'(4A) No report shall be made by the Commissioner
	(a) in any case where the member concerned has agreed that he has failed to register or declare an interest, if it is the Commissioner's opinion that the interest involved is minor, or the failure was inadvertent, and the member concerned has taken such action by way of rectification as the Commissioner may have required within any procedure approved by the IPSA for this purpose; and
	(b) in any case involving the MPs' allowance scheme, or the use of facilities or services, if the Commissioner has with the agreement of the member concerned referred the matter to the IPSA for the purpose of securing appropriate financial reimbursement, and the member has made such reimbursement within such period of time as the Commissioner considers reasonable.'.
	Amendment 11, page 5, line 5, at end insert
	'(5A) In determining the procedures, the IPSA must consult
	(a) the Leader of the House of Commons,
	(b) the Committee on Standards and Privileges, and
	(c) any other person the IPSA considers appropriate.'. (Sir George Young.)

Bernard Jenkin: rose

The Second Deputy Chairman: Does the hon. Gentleman wish to press his amendment?

Bernard Jenkin: In view of the Secretary of State's assurances, perhaps my amendment could be dealt with administratively in the House rather than by legislation. I beg to ask leave to withdraw the amendment.

The Second Deputy Chairman: It has not actually been moved. Mr. Dismore?

Andrew Dismore: I certainly will not press my new clause to a vote now, Sir Michael. I expect that my Joint Committee on Human Rights colleagues in the Lords may well table a similar amendment to ensure that the matter is not overlooked.
	 Clause 7, as amended, ordered to stand part of the Bill.

Clause 8
	  
	Enforcement

Dominic Grieve: I beg to move amendment 32, page 5, line 22, leave out from 'IPSA' to end of line 25 and insert
	'may refer to the House of Commons Committee on Standards and Privileges any findings it may make in relation to any member in the exercise of its functions.'.

The Second Deputy Chairman: With this it will be convenient to discuss the following:
	Amendment 17, page 5, line 25, at end insert
	'(2A) The Committee on Standards and Privileges may accept, modify or reject as it sees fit a recommendation under subsection (2).'.
	Amendment 65, page 5, line 25, at end insert
	'(2A) Any recommendation under subsection (2) shall be deemed to be proceedings in Parliament as expressed in the Bill of Rights 1689 notwithstanding any other provisions of this Act.'.
	Amendment 33, page 5, line 26, leave out 'or to make a recommendation under subsection (2).'.
	Amendment 46, page 5, line 28, at end insert
	', and must ensure that the member is provided with independent advice and counsel on all matters relevant to the said direction or directions.'.
	Amendment 34, page 5, line 29, leave out subsection (4).
	Amendment 18, page 5, line 34, leave out subsection (5).
	Amendment 19, page 5, line 38, leave out subsection (6).
	Amendment 20, page 5, line 38, leave out
	'Speaker's Committee on the Independent Parliamentary Standards Authority'
	and insert
	'Committee on Standards and Privileges.'.
	Amendment 21, page 5, leave out line 43.
	Amendment 66, page 6, line 2, at end insert
	'(7A) Any statement (protocol) prepared in accordance with subsections (6) and (7) shall be deemed to be proceedings in Parliament as expressed in the Bill of Rights 1689 notwithstanding any other provision of this Act.'.
	Amendment 64, page 6, line 3, leave out subsection (8).
	Amendment 36, page 6, line 4, leave out from 'powers' to end of line 5.
	Amendment 67, page 6, line 5, at end insert
	'(8A) Where any criminal investigation or proceedings are concerned with the same or related matters which are the subject of an investigation by the Commissioner or of a recommendation by IPSA, the criminal investigation or proceedings shall take precedence, subject to the agreement of the House of Commons Committee on Standards and Privileges.'.
	Amendment 97, page 6, line 6, leave out subsection (9).
	Amendment 12, page 6, line 6, leave out 'is, or'.
	Amendment 22, page 6, line 10, leave out subsection (10).
	Clause stand part.

Dominic Grieve: We now come to what I think are the core clauses, and in my judgment they start to cause considerable difficulties. I hope that the Government will look constructively at ways of avoiding those difficulties, so that the Bill does what the public wantensure that we are properly regulated, but not destroy the House's ability to be independent and to carry out its job properly on behalf of the electorate.
	The clause provides a mechanism of enforcement, and subsection (1) is completely uncontroversial. It provides that
	IPSA may direct a member of the House of Commons
	(a) to repay...within a specified time an amount paid...under the...allowances,
	and,
	(b) to take any steps necessary to correct an omission or inaccuracy...in the (register of financial interests).
	I have concerns about subsection (2), however, which states that
	IPSA may recommend to the House of Commons Committee on Standards and Privileges that the House should exercise any of its disciplinary powers in relation to a member of the House.
	The IPSA may publish a recommendation that it has given.
	It seems quite clear from the wording that IPSA will be able to make a specific recommendation to the Standards and Privileges Committee about how an hon. Member is dealt with in respect of a transgression. That, I assume, includes everything from an apology in the Chamber, through a suspension from the service of the House, tothe House has exercised this once since the second world warthe expulsion of a Member.
	The problem is that the Standards and Privileges Committee will then have to consider whether it agrees with IPSA's recommendation. If the Committee decides to agree, any public perception that it has been influenced by an outside body in reaching its own decision will be unfortunate. Of course, the Committee might decide for whatever reason that it wants to impose a different penalty, which need not be less severe than that which IPSA recommends. However, as the clause stands, it will embody in statute a specific reference to the Standards and Privileges Committee and to its powers, and they would then be judicially reviewable through the courts.
	The consequence of the Committee's powers being judicially reviewable through the courts goes to the absolute heart of Parliament's independence and what the Bill of Rights of 1689 was all about, given its insistence that what this Parliament does cannot be called into question elsewhere. From the current drafting of subsection (2), I really do not see how we can escape that conclusion. Indeed, it is noteworthy that witnesses who submitted either written or oral evidence to the Justice Committee stated very clearly that that outcome was undesirable. Professor Dawn Oliver said:
	(2) may be omitted. The House would in any event be able to exercise its disciplinary powers under existing privilege rules.
	In earlier evidence she expressed her deep concerns about the manner in which the House might proceed with a major constitutional change in respect of parliamentary privilege.

William Cash: No doubt my hon. and learned Friend has also read the evidence from the Clerk of the House. He said unequivocally that
	clause 8(2) brings in the Standards and Privileges Committee,
	and that
	what would happen if Standards and Privileges concluded that it could not accept a recommendation from the Commissioner, perhaps the recommendation was too severe on the Member, the degree of punishment or whatever was being recommended, the whole matter would then have to be resolved in the courts.
	There then followed further evidence from the Speaker's counsel making that position absolutely crystal clear.

Dominic Grieve: I thank my hon. Friend for saving me the trouble of having to read out that very passage; I was about to move on to it, but I could not have made the point better than he has. Both Professor Dawn Oliver and the Clerk of the House have expressed the same concerns. It is worth reading the totality of the evidence, including the written submissions. It is crystal clear that clause 8 embarks on issues that go to the very heart of Parliament's independence.
	There is a solution. It is amendment 32, which would delete clause 8(2) and replace it with the words
	may refer to the House of Commons Committee on Standards and Privileges any findings it may make in relation to any member in the exercise of its functions.
	Findings refers to findings of fact. IPSA would simply say to the Committee on Standards and Privileges that it had carried out an investigation, concluded that there had been a misclaim of x thousand pounds and thought that that should be drawn to the Committee's attention. That would be a completely neutral thing to do, because it would not be accompanied by any recommendation. The amendment would go a long way towards solving the problem.

Charles Walker: I have a problem with IPSA. What would happen if the compliance failure was IPSA's failure? If a Member made a claim in good faith and IPSA got it wrong, the Member would carry the can for IPSA. Over the past few months, a lot of Members have carried the can for compliance failures that were out of their hands.

Dominic Grieve: It is clear from our debate on clause 7 that the actions of the commissioner and IPSA will be judicially reviewable. I have made my point to the Minister and the Secretary of State. If we confine those external regulation functions to our salaries and allowances, that might lead to judicial review proceedings but it would not have a major impact on the independence of Parliament in doing its work.
	The difficulty is that, as one starts reading clause 8 subsection by subsection, one sees that it goes further and further into key functions of Parliament and its independence that have hitherto been regulated solely by the Standards and Privileges Committee. They are non-justiciable and are protected by the operation of the Bill of Rights 1689. The House needs to concentrate on that issue if we are to ensure that we can continue to carry out our work properly.

John Redwood: My hon. and learned Friend is making a powerful case. Under clause 8(6), one of IPSA's first duties is to try to work out the comprehensive muddle that the Bill is making of the situation. It would have to prepare a statement
	with the agreement of the Speaker's Committee on the Independent Parliamentary Standards Authority
	about how it, the commissioner, the Standards and Privileges Committee and other authorities could make sense of this complete jumble. Does that not prove that, even according to the Government's own words, the thing is a comprehensive mess?

Dominic Grieve: I agree entirely with my right hon. Friend. It all shows how poorly thought through the Bill is. It is rushed legislation. Each of the witnesses who gave evidenceexcept the Clerk of the House, whose ability to make such comments is a bit fetteredexpressed horror at the speed with which the legislation was being carried through. All the independent witnesses asked what on earth the Government were doing in rushing ahead with something of such fundamental importance to the workings of democracy in this country, without giving the matter some proper thought. We will have only two hours on Report this afternoon, and there will probably be no Third Reading. Frankly, the whole thing is a scandalbut we will have to make do with what we have.

Douglas Hogg: Clause 8(2) relates to the recommendation of IPSA. We are all assuming that the recommendation would depend on findings of fact about improprieties in allowances claims or whatever, but nothing in subsection (2) confines IPSA's recommendation to such a finding of fact. IPSA might well decide that although there was no allowances impropriety, the Member needed to be disciplined for other reasons. Is that what the House really wants to achieve? Subsection (2) is certainly couched in wide enough terms to allow that interpretation.

Dominic Grieve: My right hon. and learned Friend makes a good point, to which I hope the Minister will respond. She may argue that the terms on which IPSA and the commissioner for investigations are set up would not allow them to stray too far from the main remit of our financial affairs. However, my right hon. and learned Friend has made a perfectly valid point, which illustrates some of the difficulties that we face.
	Amendment 32 deals with clause 8(2), but as one reads down the list of enforcement clauses, the whole thing becomes murkier and murkier. I wonder why some of the subsections are there at all. They start dealing with issues relating to the punishment of Members by the House itself. Subsection (6) mentions an agreement between IPSA and the Speaker's Committee on the Independent Parliamentary Standards Authority on a protocol that requires a number of different people to work together. That protocol includes the Committee on Standards and Privileges.
	The House does not need to pause for thought for long to appreciate that if the Committee on Standards and Privileges remains included in subsection (6) it will inevitably be embroiled in court proceedings about its functions and independence. That would drive a coach and horses through the Bill of Rights 1689 and what it was designed to achieve.
	The protocol must be judicially reviewable, and it concerns relations with the Director of Public Prosecutions andwait for itthe Commissioner of Police of the Metropolis. I gently point out that a past incumbent of that post was subject to comment about the infringement of the privileges of the House in respect of the problems faced by my hon. Friend the Member for Ashford (Damian Green), a matter currently under investigation. As one goes through clause 8, one asks oneself what in it is really necessary for achieving IPSA's main functions.

Elfyn Llwyd: I am a member of the Standards and Privileges Committee, and we have always transacted our business in complete confidentiality. That will not be the case if we are subject to judicial review; all our papers and dealings and all the matters that we transact will become public. Would anybody wish to be on a Committee dealing with such matters if those things were subject to outside scrutiny by the courts? I doubt it. The change will definitely hamper the Committee's business.

Dominic Grieve: I agree with the hon. Gentleman and I go back to the evidence given yesterday to the Justice Committee by the Speaker's Counsel; I refer to page 33 of the transcription. He was asked to highlight his areas of concern about clause 8. He contrasted clause 8(2), on which I have touched and whose necessity has been questioned, with clause 8(5):
	clause 8(2) is not really saying anything about the basis of the powers for the Committee on Standards and Privileges to act...I think clause 8(5) might be saying something because it says that the failure may be punished by the House of Commons. If that is interpreted as a kind of statutory permission then there might very well be an issue as to whether the conditions of that permission had been fulfilled. If the Commission had acted unreasonably you would not have the conditions for that permission to operate, whereas contrarily with section 8(2), if I may say so...Dr Palmer is right to say it is simply like some other actor who says something should be done and then the Committee on Privileges does something. It is not a condition of the Committee of Privileges doing something that someone else has probably said something to it.
	It is clear that the Government should justify why any of the second part of clause 8below subsection (2), which I suggest should be amendedis necessary to achieve the House's functions, IPSA's functions and the proper regulation of MPs. That part of the clause is a seriously dangerous step that involves the scrutiny and review in court of how the House of Commons works.
	We have tabled amendments. Others have tabled theirs, and will doubtless speak to them. The hon. Member for Middlesbrough (Sir Stuart Bell) has tabled a really important amendment that would take away the Standards and Privileges Committee from the protocol set out in clause 8(6). Our amendment 34 seeks to leave out clause 8(4), which, as far as I can see, is completely unnecessary. There is an amendment proposing to leave out subsection (5). Each one of those needs a response from the Minister justifying the necessity for not making those changes: it should not be for us to have to justify every line that we are trying to take out.
	If the Minister is wise, and the Government are wise, this clause in its entirety can be substantially altered. She will then find that the Government have met their objectives of enabling IPSA to carry out its investigation and report to the Standards and Privileges Committee, leave it to the Committee, under our present powers, to implement whatever sanctions are necessary, and avoid the extraordinary mish-mash in the provisions as drafted, which will drag the House of Commons and its procedures into the courts.

Bob Spink: I am looking at subsection (9). Would the hon. and learned Gentleman expect that, if there were criminal proceedings against an MP, in order to avoid double jeopardy the commissioner and IPSA should not be investigating the MP at the same time for the same complaint?

Dominic Grieve: There are clearly potential issues of double jeopardy. Double jeopardy is a rather complicated subject, and once we start putting it on a statutory basis we run much more risk of landing ourselves in the sands than under the current procedures. The hon. Gentleman makes a perfectly reasonable point, but given the limited time that I have had to scrutinise the detail of the Bill, I do not have the answer.
	I hope that the Minister is able to answer those questions, and I look forward to hearing from her.

John Redwood: I rise to support my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) in all that he says about the detail of the amendments, which would go some way towards abating the problems with clause 8, and in what he says in general about the need to keep Parliament in charge of disciplining Members of Parliament.
	I find the wide-ranging debate that the Government have opened up on this clause and this Bill quite extraordinary. I have not heard any criticism of the Committee on Standards and Privileges. I have never heard of a great public controversy because it was doing its job badly. We have not been told that its justice has been inadequate. We have not felt that people have been hard done by under it. We have not felt that those who deserved to be punished have gone unpunished. It is not an issue. It is extraordinary that we are being asked to overturn that and to make the Committee subsidiary to an outside body when there is no case against it and no charge sheet that anyone has heard about. I would like to concentrate on the need, as my hon. and learned Friend said, to recast the clause, if it has to stay at all, in a way that deals with the big issue of how IPSA appears to be superior to the Committee on Standards and Privileges and how it seems to have overturned the Bill of Rights.
	If we look at subsection (6), we can see that the Government themselves acknowledge that the clause is a comprehensive muddle and a huge mess. As currently drafted, it does not make clear the relative powers and responsibilities of IPSA vis--vis the commissioner or the House of Commons Committee on Standards and Privileges. The subsection invites us to agree to a form of words whereby, although we know as legislators that it will not work in its current form and that the Government have not had time to work out how it might function, we would ask IPSA to consult the Speaker's Committee on the Independent Parliamentary Standards Authority in preparing a statement saying how all these different bodies could work together smoothly and harmoniously in a way that ensured that no difficult case fell between the gaps and that people were not put through double and triple jeopardy for no good reason. Under the list in that subsection, IPSA has to consult the commissioner, the House of Commons Committee on Standards and Privileges, the Director of Public Prosecutions, the Commissioner of Police of the Metropolis, the Speaker's Committee on the Independent Parliamentary Standards Authority, and any other person that they may have forgotten about. We can see what an absurd, burgeoning bureaucracy this is.

Peter Bone: My right hon. Friend is making a powerful argument. Am I right in thinking, in parliamentary drafting terms, that because IPSA has been put at the top of the list it has priority in its duties over others?

John Redwood: I am not a legal expert, but I would read it in that sense. It seems that IPSA is being asked to take on the main burden and to be the main initiator.
	I would have thought that given its wisdom and experience, the Committee on Standards and Privileges should be the guiding body. Many right hon. and hon. Members have given or are giving good service to that Committee. Several amendments drafted by those who have been working on it have already been accepted by the Government in the realisation that that experience is necessary. The Government should take this clause away and ask the Committee how it thinks it could best be phrased to preserve these two fundamental points: first, that Parliament must be sovereign, as the Bill of Rights rightly asserted, so that the people's rights are preserved in this Chamber; and secondly, that the good work and experience of the Committee on Standards and Privileges must continue without being messed upwithout being subject to judicial review and intrusions that would not make it fairer or better but might make its work more difficult.

David Howarth: The right hon. Gentleman raises an important point about clause 8(6). Surely the crucial question is this: could the protocol that is drawn up by IPSA end up giving obligations to everybody else on the list? If so, it is extraordinary that IPSA should give obligations not only to the House of Commons Committee but to the DPP and the police. Surely that is a complete violation of the separation of powers.

John Redwood: It is.
	My reading of the drafting suggests that none of this is subject to parliamentary approval. IPSA needs the agreement of the Speaker's Committee, but we are not told what happens if the Speaker's Committee does not agree. IPSA could publish and try to assert its view regardless, because it appears that it is primus inter pares in these matters. No procedure is set down for reconciling disputes between the Speaker's Committee and IPSA. The implication is that once IPSA has published, preferably with the agreement of the Speaker's Committee, then that is the statement from which not only this House but the courts, if they become involved, will have to operate.
	That is totally unacceptable. We are being asked to override not only the Standards and Privileges Committee but our own law-making powers by delegating a crucial element in how this complex and bureaucratic system is going to work to a draft from IPSA that it could not possibly undertake for several months until we know who the chief executive is and that person has a staff who can get to work and take advice. Presumably they would then come to see right hon. and hon. Members from the Standards and Privileges Committee. However, as the drafting makes clear, they do not have to take the view of those Membersthey can come up with their own independent view and assert that.
	For all those reasons, I hope that the Minister will realise that this proposal is impractical and cumbersome, that it cannot work, that it will delay justice rather than give justice, and that it will make the House of Commons look ridiculous rather than showing that we take these matters seriously. The overriding of procedures that have worked well is symbolic of a Government who love to railroad their way through traditional institutions that are already functioning in the name of modernisation without thinking about the difficult consequences that may follow. This will not produce more justice or a better administered Parliament; nor will it deal with cases that the present system would not otherwise deal with. It is a recipe for disaster.

Graham Allen: The most painful part of this situation is that we are all now having to confront the reality of the relationship between Government and Parliament. Over the years, all of uscertainly me, in the past 20 yearshave subjected ourselves to an incredible amount of self-delusion in thinking that the House of Commons actually meant something, that its powers were important, that it was somehow, if not an equal partner, then at least an elderly uncle whose advice could be taken seriously and had some impact on the parliamentary process and the legislative process.
	What the Government are now doing is honestly, although perhaps not deliberately, stripping away from Members of the House any last illusions that they had about the pathetic nature of the parliamentary branch of government, by not even allowing that misconception to continue. They are placing in statute, in clause 8 and other clauses, the fact that the House of Commons is at best a supplicant to Government.
	I am reminded strongly of the process that has taken place under all Governments, and been suffered by all parties, of the atrophy of local government. It was never established in a written constitution, and it never had independence, but in many regards it used to have a degree of separation and functions distinct from national Government. Over a period of 20, 30 or possibly more years we have all seen, and those of us with experience in local government have felt at the sharp end, what has happened to our local government. Those who care about our democracy have seen it, too. Through perhaps 40 or 50 Acts of Parliament, the ability of local government to act independently has been stripped or sliced away. Now, virtually everything at local level is guided by statute, by central Government and by the man in Whitehall.
	In essence, that is now our fate. Our role is being prescribed in a way that was never the case before because we did not want to disturb the people in the House of Commons or have crowd control difficulties. We wanted them to believe the mythology of parliamentary sovereignty. Just as local government's sovereignty is a thing of the pastwe are all poorer for that, although many of us acquiesced in itso parliamentary sovereignty is being condemned to the dustbin of history, not even with a nod and a wink but by statute.
	We let that go at our peril. I am not necessarily suggesting that today is the day when we can halt the process, but we will rely upon the other place, and upon the Government themselves to retreat to some extent when they bring the Bill back to this House. We are relying on them to improve this dog's breakfast of a hurried, precipitate piece of legislation, caused by our fear of what the media have managed to concoct and reveal about goings-on in this place. I hope that the Government will retreat from some of the more extreme things that we see in the Bill. If they do not, that pointit may be only a couple of weeks awaywill be a real watershed for our democracy.

Gerald Howarth: The hon. Gentleman is making an extremely important point. These are vital issues for the future of Parliament. I put it to him that this matter cannot be resolved in another place, because there are issues of privilege. My hon. Friend the Member for Stone (Mr. Cash) and my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) articulated them better than I can. This House will have to resolve the matter, and if it cedes authority, it will be finished as the supreme legislating authority in this land.

Graham Allen: I am not suggesting that we should rely upon the other place, but even the fact that the Lords will have had a few more days to read the Bill, which I suspect colleagues in this place have not done, will allow them to table some serious amendments. The Bill will then return here, and I hope that at that point, those of us who have been in the Chamber for these debates will take up the challenge. There have been incredible contributions from all parts of the House, which I hope will be studied in detail in years to come as evidence of some of the days when Parliament said no to this process. I hope that we ensure that all colleagues understand what the consequences will be if we allow provisions such as clause 8 to go through unamended.

Douglas Hogg: I have just a brief point. I agree entirely with what the hon. Gentleman is saying. We are establishing an important precedent that could be invoked time and time again by future Governments. We need to be chary about doing that, because it will be a declaration about the relationship that Parliament deems that it has with our external authorities.

Graham Allen: Indeed, and the louder the Government talk about democratising the House of Commons, the more careful we ought to be to study the legislation that comes forward. There is talk about reforming the House through a Select Committee, for example, but at the moment there is no resolution to establish such a Committee, and no terms of reference that command agreement throughout the House have yet been on the Order Paper.
	There is ever stronger rhetoric about rebuilding our democracy, but of course the rhetoric can be belied by the lack of means to create that democracy. Indeed, the very means to undermine it further may be in front of us, but some of us may be missing them because of the loudness of the rhetoric about increasing and improving our democracy.

John Redwood: I pay tribute to the hon. Gentleman for his work over a sustained period to try to get the House to take more power over the Executive. Does he agree that it makes for better government if Ministers see the need to come to the House early and have things exposed to proper debate, as I hope they will with this Bill?

Graham Allen: That is a measure of the fear with which Governments unnecessarily view this House. If we have a strong House of Commons and a strong Parliament, Government themselves are the main beneficiary. We have better value for money, better legislation and more public involvement, and it does not require eight efforts to get child support legislation right. At least once a year we try to get the criminal justice system right. We should have proper pre-legislative and post-legislative scrutiny, yet there are those in government who run in fear of that, wishing instead to have legislation drafted by unelected officials in their Departments and rubber-stamped by the House. We all lose in that deal, and we could all win in a deal whereby a strong Executive had self-confidence and the judgment to take the view of the House when it had been properly and responsibly expressed. The only greater beneficiary than the Government would be the British people.

William Cash: On the drafting of legislation, to which the hon. Gentleman has rightly referred, the evidence that has been heard in the past few days has had alarming characteristics. The most obvious is that first parliamentary counsel appears to have prepared the memorandum upon which the so-called Lord High Chancellor and Secretary of State for Justice is relying. It is clear that there is a complete difference of opinion between the Clerk of the House and first parliamentary counsel. Does the hon. Gentleman agree that that ought to worry people a great deal?

Graham Allen: I do not want to stray too far from the clause, but one day, when we have a self-respecting and self-confident Parliament, we will have our own parliamentary draftspeople and our own right to legal advice on going to war or whatever it may be. We will have our own capabilities to transform the legislative framework. At the moment, we have an Executive who are not directly elected by the British people taking the advice of a civil service that has no familiarity whatever with the ballot box. Members of this House are being overseen by people who have no understanding of electoral politics and our democracy, but who decide on the rights of Members. Those rights have been sacredperhaps too sacred, but they have been in place for many years. I hope that colleagues will press their case to the Secretary of State, and that he will take away the expressions of anxiety that he has heard in the past day or soand will hear until the end of the dayand rework the Bill so that it does what we all thought it intended to do: create a strong parliamentary standards authority to ensure that abuses that have happened in the past cannot happen in future. As part of that, it should construct a much broader framework, so that our legislature, rather than becoming a quango, an advisory body or a quaint but withered part of our constitutional arrangements, can play not only the role that it fulfilled in years gone by, but an important role in rebuilding our democracy and people's trust, which has been so sorely tested in the past month or two.

George Young: The shadow of the guillotine is beginning to fall over our debate, so I will not follow up the very interesting speech of the hon. Member for Nottingham, North (Mr. Allen), with whom I agree about many parliamentary matters, but focus on issues that directly concern the Committee on Standards and Privileges and enforcement.
	I want to pick up the comment of my right hon. Friend the Member for Wokingham (Mr. Redwood), who said that the aspect of the Bill that we are considering is not the problem. The problem has not been the Parliamentary Commissioner for Standards and the Standards and Privileges Committee. We operate downstream, and the problems have been upstream, with processing and making claims. We do not process claims; we process complaints, and I believe that that part of the system has operated well.
	The system was set up some 14 or 15 years agoit is tried and tested and has been improved. The House has been well served by Philip Mawer and now by John Lyon. The Committee on which I serve has tried to operate the rules of the House dispassionately and fairly. In his evidence to the Committee on Standards in Public Life, which is now sitting, Anthony King said that that part of the system works quite well. Clause 8 would dismantle it at breakneck speed and try to replace it. By doing that at speed, one may not get it right.
	The Government are trying to fetter the discretion of the Standards and Privileges Committee because they believe that the tariffs that we have operated are not tough enough. In the speech that the Leader of the House made a few days ago, she referred to the long time that had elapsed since someone was expelled. My hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) did not make it clear that the Standards and Privileges Committee simply makes recommendations on the tariff to the House. It is open to any Member and to the Government to amend the tariffs recommended by the Standards and Privileges Committee if they think that they are too lenient or too tough.
	I believe that we could achieve some of the Government's objectives, not by dismantling the machinery, but by re-examining the tariff. If there is a general view that we are not being tough enough, we can tackle that without the proposed paraphernalia.

Charles Walker: When a Member is suspended, even for as little as two weeks, that can effectively end their political career, as happened only recently.

George Young: All we have are our reputations, which can be destroyed by a critical report from my Committee. That has happened many times. The reputational hit is not fully understood outside the House.
	Clause 8 tries to make the Standards and Privileges Committee the agent of an outside body. The moment we do that, we run into all sorts of difficulties, which the Clerk of the House identified in his memorandum. One cannot make us the agent of an outside body, as subsection (2) would do, without running into all the constitutional difficulties that we outlined.
	Amendment 32, which my hon. Friend the Member for Rutland and Melton (Alan Duncan) tabled, would remove IPSA's power to recommend to my Committee the application of a particular sanction. For that, it substitutes a power to refer its findings to the Committee. That would broadly replicate the current position, whereby the Parliamentary Commissioner for Standards reports his findings to the Standards and Privileges Committee, which then determines the appropriate sanction. I support that amendment because it replicates, as far as possible, the current position. I remind the House that my Committee has said that it would be prepared to have lay members serving on it if that helped solve the problem that the Government identified of our being somehow out of touch with the outside world.
	Amendment 12 would remove the provision that allows the new commissioner to conduct an investigation into a case that is simultaneously the subject of criminal proceedingsthe hon. Member for Castle Point (Bob Spink) made a point about thatwhile leaving in place the provision that allows him to carry out an investigation into a case that has already been the subject of such proceedings. That is crucial. We cannot have a position whereby a Member is subject to competing jurisdictions for the same offence. He cannot have his collar felt by the Metropolitan police and the Parliamentary Commissioner for Standards at the same time.
	Perhaps I can leave the amendments that the hon. Member for Middlesbrough (Sir Stuart Bell) has tabled to him to consider. I have some sympathy with amendment 19, which deletes subsection (6). That would deal with the problem that my hon. and learned Friend the Member for Beaconsfield outlined. If subsection (6) is to remain, we must knock out the reference to the Speaker's Committee. The Committee on Standards and Privileges should be responsible for drawing up the protocol; it is nothing to do with the Speaker's Committee, which is solely concerned with appointing and spending plans, not procedure.
	I have genuine anxieties about the implications of the Bill. The way through is to follow the path laid out by my hon. and learned Friend the Member for Beaconsfield, which avoids some of the complications that he rightly identified.

Mark Durkan: The hon. Member for Nottingham, North (Mr. Allen) made some significant points, many of which arise in the context of clause 8. Of course, many go much further, too.
	In our debates, we keep coming up against the there's a hole in my bucket, dear Liza syndrome. We claim that we want to create an independent parliamentary standards authority, yet, at every turn, we assert the sovereignty of Parliament and say that there must be a dual control brake on anything that IPSA or an investigator might do. We need to get real. The public feel little about the sovereignty of Parliament, which we value and discuss here, but are very angry about the avarice of parliamentarians, as they perceive it and as has been represented over past months. People want to know that we will allow any independent standards authority that we create to be independent. Yes, we should ensure that there cannot be excesses and that there are limits. We must also ensure protection for Members' rights and reputations, individually and collectively. Several sensible amendments have been tabled about that, and some are in the group that we are considering.

Gerald Howarth: We all understand the public anger, but we cannot simply have a knee-jerk reactionI see the Justice Secretary frowning, unusually. If we understand the significance of parliamentary sovereignty and the public do not, and we knowingly impair it, we will damage hugely the interests of our constituents and our ability to serve them. It is nothing to do with protecting us, but with safeguarding the fundamental rights of the British people and our powers in this place to represent them. We must not allow the Bill to impair that fundamental principle. If we do so, we do grave damage to our constituents.

Mark Durkan: I thank the hon. Gentleman for that point. None of us wants to do damage to the sovereignty of Parliament. However, we will not help the reputation of Parliament if we respond to every measure to try to restore credibility and public confidence by simply boasting about the sovereignty of Parliament. I have heard more from some hon. Members about the sovereignty of Parliament and about standing up to the Executive and not being cowed in relation to this Bill than I heard in relation to measures such as the Counter-Terrorism Act 2008, when Parliament really should have asserted itself and when a lot of people should, in good conscience, have known that something was wrong. The same goes for identity cards. I have heard people today celebrating what has happened, yet they were willing to be whipped into voting for them and all the rest of it, so let us be a bit more real about some of these issues. It seems that some people are a bit more assiduous in protecting the sovereignty of Parliament in relation to parliamentary standards and the privileges and rights of Members than they have been in relation to the wider interests of their constituents and the citizens of the United Kingdom. So let us get real all round. It is not just the Executive who have questions to answer; all of us have questions that we should perhaps ask of ourselves and that we should answer.
	Amendment 32 is sensible. The idea of the authority making recommendations and just giving them to the Standards and Privileges Committee on a hand-me-down basis seems crude and excessive. Amendment 32 would deal with that, thereby obviating the need for amendments 17 and 65, which would seem to be sensible. Some of the other amendments, however, I am not so sure about. Amendment 34 would mean leaving out clause 8(4), which would in turn mean leaving out subsection (5). I do not know that it would be right to leave those two subsections out. There would then be a hole in the procedures and a hole in the Bill, although some fine-tuning may still be needed.

Dominic Grieve: It is very simple: if the hon. Gentleman reads the report of the Select Committee on Justice, he will see that everything after clause 8(4) does nothing to add to the regulatory powers of IPSA, but everything to undermine the independence of this House. By taking out one, the rest fall down like a domino, and that is why it should go.

Mark Durkan: That is also why, if people think that we have to be cautious, because the legislation has been brought forward in haste, I would be cautious about demolishing parts of it in haste. We need to consider whether we are getting the tuning of the Bill exactly right.

Robert Smith: I can understand the hon. Gentleman's caution. In particular, he was right to remind the House of the importance of the independent handling of expenses, salaries and finances. However, if we are cautious about what we allow to go through in the Bill, so that it focuses on that core function, but then decide after more consideration that there are other functions or ways in which we want to go further, that is surely safer than allowing things to creep through in the Bill that are dangerous or have risks attached, and then repenting at leisure as we try to sort them all out.

Mark Durkan: I fully agree. Indeed, I have supported a number of amendments and, even in this bunch, there are a number that I would support and some that, if adopted, would make the need for others disappear. However, I worry that some of the amendments would go so far as to leave a significant hole in the Bill. That might provide a site for which planning permission could be given to do more things in relation to other issues. However, I would prefer to hear from the Justice Secretary or the Deputy Leader of the House before drawing those full conclusions.
	On clause 8(6), we definitely need some provisions in respect of a protocol, but I believe that subsection (6) is wrong as drafted. I do not go as far as the hon. and learned Member for Beaconsfield (Mr. Grieve), in saying that it is a recipe for disaster or that the sky will fall, in the way that he colourfully suggested it would. However, perhaps we have all missed something. Perhaps we should have amended subsection (6), so that it said that IPSA and the Speaker's Committee or the Standards and Privileges Committee would seek to agree protocols with the following. Instead, subsection (6) says that IPSA will prepare a statement or a protocol on how the following will work together. That means not just how the following will work with IPSA and somebody else, but how the following will work together. It therefore seems that something needs to be done about subsection (6).

Bernard Jenkin: I will endeavour to be as brief as possible, Mrs. Heal. I beg to move amendments 65, 66, 64

Sylvia Heal: Order. Perhaps I should remind the hon. Gentleman that we are actually discussing amendment 32. He can speak to those amendments, but they do not need to be moved at this point.

Bernard Jenkin: I am out of practice again, Mrs. Heal. I wish to speak to amendments 65, 66, 64 and 67, which relate to privilege and should be read in conjunction with amendment 94, which will be debated under clause 10, should we get that far.
	The importance of privilege was underlined by the learned Clerk in the evidence that he gave yesterday. It is well to remind ourselves of the purpose of privilege. He said:
	If there was not that freedom
	of speech,
	Parliament could not...function effectively.
	He said later:
	I think the traditional view in this country, the United States and a lot of other countries, is that if speech is not free in the House of Commons, it is not free anywhere...we are not unique by any means. All systems have immunities and they are recognised.
	Most importantly of all, he made it clear that
	if you start to make exceptions to parliamentary privilege for one reason or another, under one Act or another, eventually you will undermine the whole principle.
	The Chairman then said:
	The earlier decisions to do this are now being adduced in support of the current proposals,
	to which the learned Clerk answered yes. That is why we should tackle the question of privilege in these debates.

Edward Garnier: Is not the short point that the only thing that stands between the people and arbitrary government is this Chamber? If we undermine the position of this House in that relationship, we open up the possibility of dictatorship, arbitrary government and misconduct in government. If we lose sight of that, we might as well give up.

Bernard Jenkin: I wholeheartedly agree with my hon. and learned Friend. I would submit that, not by virtue of the erosion of our sovereignty but by virtue of the imposition of whippingthe whipping on this Bill on the Government Benches is an example of thatthe House of Commons is not losing its sovereignty, but simply giving away our influence. We should use this opportunity to wrest it back.
	I support the principle of independent regulation. Indeed, I do not think that anyone speaking in this debate has suggested that we should take the principle of independent regulation out of the Bill. The scheme that I propose with the amendments standing in my name would mean that the process of independent regulation would become privileged itself. We should put an envelope of privilege round the entirety of the Bill's operation, with the exception of the criminal offences, which is another matter that I shall not try to address. However, the principle is that privilege should envelope the entire Bill.
	Therefore, my amendment 65 proposes a new subsection (2A) of clause 8, which reads:
	Any recommendation under subsection (2)
	I am led to understand that that would also mean any direction under subsection (1)
	shall be deemed to be proceedings in Parliament as expressed in the Bill of Rights 1689 notwithstanding any other provisions of this Act.
	That would have the effect of making the activities under clause 8 privilegedthat is, beyond question by the courts, so that they could take in evidence what Members of Parliament had said in this place, because their proceedings would be privileged. There would then be no question of any of our proceedings leaking into the jurisdiction of the courts outside Parliament. I have also proposed a similar amendment to clause 7, for debate on Report, which would mean that all investigations would be regarded as proceedings in Parliament.
	My amendment 64 would remove clause 8(8). I have read subsection (8) many times, but I simply do not quite understand what it means. It seems to me to have been drafted highly ambiguouslyalthough that probably means that parliamentary counsel are much cleverer people than I. However, even the explanatory notes say that subsection (8)
	preserves the right of the House of Commons to exercise any disciplinary powers which it may have.
	I do not know why we need to legislate in the Bill to allow a sovereign House of Commons to continue to exercise its own disciplinary powers. Why is that in the Bill?
	The explanatory notes continue:
	It is not to be limited to acting only following an investigation by the Commissioner or a recommendation from the IPSA.
	If we believe that we are sovereign, how could any implication in the Bill limit what the House of Commons does? The very fact that the Government have sought to put this provision into the Bill at all underlines the weakness of their case that so much of this is justiciable: they are putting provisions in legislation to try to prevent the actions of the House from becoming justiciable and limited.

Jack Straw: I am listening to the hon. Gentleman with some care, but if I may say so, I think he is making a bit of meal of subsection (8), which is there for clarification. That is its purpose, although I would be happy to give it further consideration, if necessary.

Edward Garnier: I thought we were on clause 8.

Jack Straw: I thought we were on clause 8 as well.

Bernard Jenkin: I will move on as swiftly as I can.
	My amendment 67 addresses the question of what should take precedence. Even if there is, as I propose, an envelope of privilege around the entire activities of IPSA and the commissioner, there would still need to be some means of deferring to criminal proceedings if they were in progress. It is in any case something that we do automatically on an administrative basis within the House. The amendment proposes:
	Where any criminal investigation or proceedings are concerned with the same or related matters which are the subject of an investigation by the Commissioner or of a recommendation by IPSA, the criminal investigation or proceedings shall take precedence,
	and I add,
	subject to the agreement of the House of Commons Committee on Standards and Privileges,
	which should surely be the final arbiter of such a case.
	Finally, I shall briefly refer to amendment 94, which I appreciate is in a different group. It would amend clause 10, and it states:
	Where proceedings of the IPSA and proceedings of the Commissioner arise from section 7 (investigations), section 8 (enforcement) or section 9 (offences), they shall be deemed to be proceedings in Parliament in accordance with Article IX of the Bill of Rights 1689.
	My amendments may be imperfectly drafted and they may not create a perfect envelope around the activities that need to be enveloped, but I honestly believe that they provide a solution to the Secretary of State's problem. He wants independent regulation, he wants the independent regulator to be able to look at all the evidence, and he wants the commission to be able to conduct investigations as freely as possible, but he really does not want the courts interfering with these processes and he does not want to provide an avenue for the courts to look at what has been happening in Parliament and to have a chilling effect on free speech.
	If my amendments are accepted, along with those in the name of my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) that strike out the final subsection of clause 10, we will have created a perfect envelope to allow the Bill to go forwardenveloped by privilege exactly as I believe the Secretary of State intends, but as the Bill fails to deliver at the moment, which is completely unacceptable.

Stuart Bell: I am grateful, Mrs. Heal, for the opportunity to participate in the debate on what the hon. and learned Member for Beaconsfield (Mr. Grieve) has said is possibly the heart of the Bill. I shall speak to amendments 18 to 21, which I tabled.
	The essence of this part of the Bill, as the hon. Member for North Essex (Mr. Jenkin) has said, is the Independent Parliamentary Standards Authority, which is not a matter of question in the House, as it has been fully accepted and agreed by the parties themselves as well as by the party leaders. What has been a cause for concern is the determination of privilege in this House, and particularly whether it should stay within its precincts or whether, in line with Congress in the US, it can be subordinated to the Supreme Court in that case, or to the courts of law in our case. It has always been my view that conveying parliamentary privileges to the courts for them to determine our actions, our speeches, our proceedings in Committee and the like not only destroys the essential pillar of our democracythe pillar that protects to the Member of Parliament on the Floor of this Housebut prevents a Member from seeking to defend the constituents who sent him here. The principle of redress would be somewhat diminished if our proceedings were to be interpreted elsewhere and a determination of them made elsewhere. That would certainly destroy the essence and basis of the House of Commons as we know it, which would do a great disservice to past generations and also to future generations of parliamentarians.
	I am grateful to Dr. Malcolm Jack and the Clerks for putting together a very important and significant document to deal with the problem. If I may, I will happily paraphrase liberally what it says. As I understand clause 8, which deals with enforcement, it raises a number of questions of principle relating to privilege. Clause 8(2) identifies recommendations to the Committee on Standards and Privileges that would be covered by parliamentary privilege, but if the Committee declined to act on a recommendation, it could presumably become the basis of legal proceedings in which the Commissioner, or someone else, sought to require the Committee to comply. In my humble and respectful submission, Mrs. Heal, it is not enough to argue that clause 8(2) speaks only of a recommendation, as the extent to which a reasonable recommendation should be accepted would itself become a matter for determination by the courts and a matter of interpretation.
	Clause 8(5) appears to make the exercise by the House of its disciplinary powers a matter of statute, since it seems to confer on the House a statutory permission to exercise those powers in the circumstances provided for in the subsection. If the circumstances in which the House may exercise disciplinary powers became a question of law, it would then be open to challenge before the courts. There are a number of examples that I could provide here, but I am aware of the guillotine on our proceedings and I would not wish to delay the Committee in its consideration of my amendments and others. It could be argued, however, that it is only the failure under clause 8(4) and no other, that may be punishable by the House. That would be a question requiring determination by the courts.
	Clause 8(6) requires IPSA to prepare a protocol on how IPSA, the Commissioner, the House of Commons Committee on Standards and Privileges, the Director of Public Prosecutions, the Commissioner of Police of the Metropolis, and any other person whom IPSA considers appropriate, are going to work with each other. Given the various examples of the intervention of the police in our precincts and their involvement in politics over the last few years, I am not entirely sure that the Commissioner of Police of the Metropolis will be very enthusiastic about embracing that concept. I would not imagine, or dare to suppose, what the Director of Public Prosecutions would say to that, either. It is not clear to me whether this is meant to impose any obligation on any of the parties to observe the protocol. Again, this will be a question of law to be determined by the courts. If it imposes an obligationand there seems little point in having such a protocol unless it does impose some sort of obligationit raises the question of whether IPSA should be entitled to bind a Committee of the House as to how it is to conduct its own work. An analogous issue arises for the DPP in the exercise of his discretions as to whether proceedings should be fettered.
	I believe that there are dangers in this enforcement clause. It could lead to litigation, or constrain the House in the use of other sanctions that might be regarded as disciplinary. The issue of a formal reprimand and a formal requirement for an apology are within the powers of the House, but are not covered. The clause might also prevent the House from adopting other sanctions required by certain circumstances. The hon. and learned Member for Beaconsfield mentioned some of the sanctions currently available to the Committee on Standards and Privileges: for example, the ability to ban a Member from the use of certain facilities of the House.
	I intend my amendments to help the House to preserve its privileges and to avoid a determination of those privileges by the courts.

Elfyn Llwyd: When I speak about privilege, I do not do so as a member of any kind of club. It is the privilege of the people whom I represent that I am defending today, rather than anything to do with me personally or with any other Member. Similarly, when we talk about sovereignty we are talking about the sovereignty of the people, and we should hold that sacrosanct as well.
	In evidence submitted in a memorandum yesterday, Professor Dawn Oliver of University college London said:
	I am afraid my general reaction is that the issues about MPs' salaries, allowances and standards are too important to be dealt with in a bill rushed through Parliament without any prior consultations, Green Papers, etc., especially since the Committee on Standards in Public Life is considering some of the issues covered by the Bill along with others.
	Viewing the reality of the situation, however, she went on to say:
	Having made those points I assume that much of the Bill will be passed, and my remaining points are on details and how some of the problems about parliamentary privilege might be avoided. I go through the Bill clause by clause.
	On clause 8, she said:
	(2) may be omitted. The House would in any event be able to exercise its disciplinary powers under existing privilege rules.
	(4) (5) are unnecessary. The House has these powers anyway.
	(6) amend to omit (c). Under (f) it is obvious the IPSA will consult HC bodies.
	(8) is unnecessary. If omitted (10) is unnecessary. Both should be omitted.
	(11) would be unnecessary if the above measures are omitted as suggested.
	Members might consider that a rather iconoclastic and Luddite response to the Bill, but it comes from a professor of constitutional law who knows a thing or two about the field that we are discussing.
	In the interests of brevity I shall concentrate on amendment 32, which I regard as a very elegant way of achieving what the learned professor wanted. I think that we are trading on extremely dangerous ground. We are driving a coach and horses through the constitution of this place. I do not say that through any love of this place. The hon. Member for Nottingham, North (Mr. Allen) made some very good points, and I want to align my position with his.

Edward Leigh: The hon. Gentleman has put his finger on what concerns me. At present we have a rule called parliamentary privilege, to which there are certain exceptions. We are in danger of moving slowly towards a rulethe supremacy of the courtswith certain exceptions based on parliamentary privilege. There is a very strong difference between those two concepts.

Elfyn Llwyd: That is absolutely true. If we meddle with parliamentary privilege we shall start a torrent of litigation, and, more to the point, we shall find that we are unable to do the work that we should be doing on behalf of our constituents.
	As I said yesterday, and as Members know, we sometimes hide behind the cloak of privilege. We do it rarely, but we do it to good purpose when an overbearing person or company treads on an innocent constituent who is unable to fight back. We can often redress the balance in this place, but we shall soon find that we are unable to do that if our deliberations become subject to the law of the land. If that power were abused I would say, Fine, let's get rid of it, but it is not abused. It is an essential tool for us as parliamentarians, and we should not allow anyone to start chipping away at it.
	Amendment 32 deals with the issue sensibly. It preserves the role of the Committee on Standards and Privileges. Although I speak as a member of that Committee, I think that it has done a good job. I echo what was said earlier by its Chairman, the right hon. Member for North-West Hampshire (Sir George Young). I hope that if the amendment is pressed to a Division, Members will see fit to support it, in the best interests of this place and, more importantly, in those of their constituents.

Robert Smith: I shall speak briefly, because we must try to reach clause 10 somehow, although I fear that in view of the way in which this debate is proceeding, we shall not manage to do so.
	All the speeches so far have been extremely important, and have focused effectively on the issues at stake. The message to the Government is that we should have been allowed more time to scrutinise the legislation properly, and the message to the other place is that it will have to work very hard to ensure that we do not let slip anything that we should not have let slip. As has been said, when we talk about protecting privilege we are talking about the privilege of our constituents. It is extremely important to remember that.
	As the hon. Member for Foyle (Mark Durkan) reminded us, we must acknowledge the context of the wider debate: the fact that we need to rejuvenate by introducing the external handling of allowances, expenses and finances. We should not go too far too quickly, however, and do other damage to the way in which this House works. In the long run, we do need major reforms: constitutional reform, such as a proper written constitution, and other ways to tackle issues that come before the House. That is not going to happen in Committee today, however. Therefore, I urge the House to support amendment 32 and to take on board the wise words of the right hon. Member for North-West Hampshire (Sir George Young) about protecting the role of his Committee.
	I urge Members to make sure that the Bill remains focused on the key political imperative of addressing the aspects of this House that the public have concerns about. It should not go wider than that at this stage. We should look at other issues in more measured times; thereby we can ensure that we do not do any more damage that could undermine the workings of the House. If we were to do such damage, undoing it would be almost impossible. It is therefore very important that the Bill remain narrow in focusand that is even more important given this short debate, and the lack of time.

David Heathcoat-Amory: Hon. Members in all parts of the House are making valiant attempts to improve this part of the Bill. I support most of the amendments, but this is essentially a fruitless exercise because we are trying to improve a Bill that is irretrievably broken. The debate we have had on this clause highlights that; it shows the problems caused when an attempt to fix the allowances system becomes, during the course of the Bill's passage, an attempt to reform large chunks of the British constitution. If that was the aim, it should have been admitted right at the start, and the attempt to achieve it should have been approached with due humility and after a good deal of deliberation. Instead, we are now stumbling around the constitution, touching on very delicate matters of immunities, rights and privileges. If such reforms are necessary, they should be the subject of an entirely different piece of legislation.
	What we are doing in this Bill is setting up new bodies and creating new appointments with new powers and responsibilities, but the relationships between them all are very unclear. They overlap, and they conflict in a number of important respects. That is very well illustrated by subsection (6), under which this entire matter is to be postponed to a protocol to be drawn up by one of the new bodiesthe super-quango itself, IPSAto try to find a way of ordering the relationships between the bodies, both old and new. If the protocol is to be effective, it will have to be an extraordinarily long document.
	I do not know who in IPSA will do this work, as I do not know what the staffing arrangements will be, but they are going to have to try to order the relationship between the police and this House, for instance. We all know that that is a very difficult matter and we glimpsed that in the police raid on an hon. Member's office. One aspect of that was that a computer that was seized probably contained material that touched on matters of the House and proceedings in the House; it certainly contained files that held material relating to other hon. Members. Wisely, the police did not proceed with that prosecution, but that matter of privilege was said to be the subject of an extensive documentwhich I have not seen yet. That is just one tiny example of the problems under an unwritten constitution of ordering the relationships between the external enforcement authoritiesthe policeand this House and its Committees. So if we are to codify the entire relationship, not only the one between the House and the police, but the one between the Director of Public Prosecutions and other persons unknown, and the relationships involving IPSA and the commissioner, that will require a real volume in itself and it is all unnecessary.
	The dangerous part is that the protocol will, by definition, restrict this House. If it were not to do so, it would be a completely pointless document. There is no point having a protocol that does not do something, because it, thus, merely becomes a declaration. It becomes a bit of a new Labour totemic label: something that is desirable but has no effect. If something is in an Act of Parliament, it is designed to bind and to impose obligations, and one of the bodies on which this Bill will impose obligations is the Standards and Privileges Committee. It is wrong that that should be done in a protocol drawn up by an external body. If the Bill is intended to bind this House in this way, that should be openly admitted by those on the Treasury Bench. Of course, our Committees work to rules in Standing Orders, but this Bill means that they will obtain instructions in a protocol drawn up by other people. If that is intended, it should be admitted. If it is not intended, it should be withdrawn.

Charles Walker: Over the past 17 years, whenever there has been a crisis of confidence in this country, Parliament has created a quango. We are now reaping what we have sown because we are creating a super-quango to regulate ourselves, and that is a retrograde and extremely worrying step. I say to the hon. Member for Foyle (Mark Durkan) that of course the public are concerned when we seem to get on our high horse about sovereignty

Jack Straw: The hon. Gentleman says that this body will be a super-quango. He may wish to describe it pejoratively as such, but may I remind him that on 10 June his own party leader actively supported its establishment?

Charles Walker: The Secretary of State makes my argument beautifully. This is a House matter, and I am raising my concerns as a Member of Parliament who is defending the sovereignty that goes with being an MP and that belongs to my constituents. I do not think that the British public really despise us because of our expensesthat situation is a manifestation of their frustrations; they despise us because we have become supine lickspittles, who are more concerned with sucking up to the Executive than with representing the public's views in this place. We are in grave danger of handing

The First Deputy Chairman: Order. I wonder whether the hon. Gentleman is going to continue with his remarks in relation to amendment 32.

Charles Walker: I just wish to support my Front-Bench colleagues in introducing their amendment. This is a very imperfect Billit is an appalling onebut at least they are trying to make it a little better and a little more tolerable.

Barbara Keeley: The 17 amendments in this group make it the largest that we will discuss today, so I hope that hon. Members will bear with me as I go through them. First, I wish to touch on a matter that a great number of the people who have contributed to this lively debate have discussed: privilege and concern for their constituents. There is a dangersome of the later contributions started to approach thisthat that view could become self-serving, and we must be careful to avoid that. A number of the contributions reflected the fact that we must keep reminding ourselves that we are in the middle of a recessionary downturn and that what people are worried about is not the issues that some hon. Members have raised. What people are worried about is their jobs and their homes. In the middle of all that, we have faced a scandal with which we have to deal. That is the key matter.

Edward Garnier: I hope that the hon. Lady is not going to allow herself to be misled by the ancient word privilege, which is a confusing one. I appreciate that those who do not think about it might find it difficult to understand its meaning. Perhaps we should use terms such as trusteeship or dutywords that are more widely understood. However, for shorthand purposesthanks to the Government's guillotine we have to speak in shorthandthe word privilege is the one that we will use and understand in this Chamber. That may require us to explain the term to those outside, but that should not allow her to misbehave in introducing her remarks by traducing those who have spoken not only passionately, but very seriously about the questions relating to the privileges of this House.

Barbara Keeley: I am not doing that: I am just seeking to remind hon. Members of the context in which we are operating. It is easy, when we get absorbed in a three-day debate, to forget the context outside the House.

Alistair Carmichael: May I refer the Minister to the words of Lord Bingham when he gave evidence to the Joint Committee on parliamentary privilege in 1998? He said:
	The term 'privilege' is, I think, plainly unfortunate, although hallowed by long usage. It wrongly suggests some perk or special right or dignity, which certain office-holders enjoy, when attention should be concentrated on the limited exemption from the ordinary law which the effective performance of a public duty requires.
	That is what we are talking about. Does the Minister agree that we throw that away at our peril?

Barbara Keeley: Indeed I do, but I do not think that the sensible measures in this Bill would do that.

Robert Smith: The Deputy Leader of the House dismisses the comments of my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) with one line, but she earlier prayed in aid the fact that we are in a recession with which the Government do not seem to have been coping. A recession should not be an excuse for failing to take seriously the constitutional position of this House.

Barbara Keeley: I agree, and I hope that I have not given that impression.
	Amendments 32, 33 and 36 would remove the power of the new bodyIPSAto make recommendations to the House about possible disciplinary sanctions and the provision that the recommendations might be published. The hon. Member for Foyle (Mark Durkan) made the point that we cannot have a dual control system. This is not a driving lesson: we need to change the system and we cannot have dual control.
	As my right hon. Friend the Justice Secretary mentioned, we have all agreed that we need to set up an outside body to take over the running of our allowances and the financial rules. We cannot continue to be wholly self-regulating in such matters. The approach that we have adopted is to provide for IPSA to recommendor, in some cases, directaction, but to leave it to the House to enforce it. That is the key point, and that approach best treads the path between responding to the real public anger on this issue and respecting the position of the House.
	There has been reference to the work of the Standards and Privileges Committee, and we have to weigh the excellent work that it has done in most cases with the very real public discontent with our processes. It would not meet our objectives of transparency and independence if all IPSA could do were to make a report to the Committee. One of the key messages that we have to take from the public anger about these matters in recent months is that the old way of dealing with them is no longer judged to be adequate. We are not overriding procedures that the public perceive as working well and we cannot return to a system that is entirely managed within the House.
	The proposals in the Bill would give the House as large a continuing role as is compatible with meeting the concerns of our constituents that we must be seen to be subject to proper regulation and supervision.

William Cash: Does the Minister think that the public might be extremely angered by the idea that they as electors should see such decisions taken by the courts rather than by those whom they have elected? That is a fundamental question of democracy. I suggest that an opinion poll would be guaranteed to show that at least 85 per cent. of the electorate would prefer to continue with their democracy, not hand it over to judicial supremacy.

Barbara Keeley: The point that I keep asserting is that we need to be clear about the public confidence, and the public do not have confidence in some of the processes that we have been talking about.
	I want now to turn to amendment 17.

John Redwood: rose

Barbara Keeley: I shall give way, but time is very limited and I have a large group of 17 amendments to work through.

John Redwood: Can the Minister not understand that the public were unhappy about the generosity of the scheme and the lax administration in some cases, not about the enforcement of cases against Members who had misbehaved? She is tackling the latter, not the former. How does that make any difference to the issue that annoyed the public?

Barbara Keeley: I am going to have to start repeating myself, Mrs. Heal, if people keep asking me the same questions.
	Let me turn to amendment 17, which was tabled by my hon. Friend the Member for Middlesbrough (Sir Stuart Bell). I understood the concern expressed in this amendment that, as the clause is drafted, it might make a decision of how to respond to a recommendation justiciable, or at least that the Standards and Privileges Committee would be obliged to act on a recommendation in some circumstances. The key point is that nothing in the Bill takes away the inherent powers of the House to discipline its Members as it thinks fit. In fact, there is a provision that makes it clear that nothing in the Bill prevents the House from exercising its disciplinary functions other than following an IPSA process. IPSA has the power only to recommend, not to enforce its recommendations, so it is quite clear from the Bill that the Committee and the House have a free hand to do with the recommendation what they think fit.

Dominic Grieve: That simply cannot be right. If the Minister has bothered to read the report from the Justice Committee and the opinions of experts, she will know that the decisions will become justiciable because they have been incorporated in statute. We cannot get away from thatit cannot be magicked awayand so far, I have to say, she has said nothing about that.

Barbara Keeley: To return to amendment 17, I understand that the Members who tabled it might be prepared not to press it to a Division because of the key point that I have just made. The amendment carries the risk of fettering the Committee's discretion.

Edward Leigh: Will the hon. Lady give way?

Barbara Keeley: I need to make a little progress.
	Let me turn to amendments 65 and 66, which were tabled by the hon. Member for North Essex (Mr. Jenkin). I understand that amendment 65 concerns fears about how the courts will react to a new regulatory scheme. In particular, there is a concern that the Standards and Privileges Committee could be subject to judicial review for failing to follow a recommendation. The Bill does not repeal article IX of the Bill of Rightsnor does it disapply it. In the absence of an explicit provision or necessary implication, a court will continue to read article IX as applying. There is clearly no necessary implication in these provisions that article IX should be taken to be amended in any way. That would mean that it is more likely that a court will consider that any proceedings of the Standards and Privileges Committee would remain within the protection of article IX.

Bernard Jenkin: The Bill contains other clauses, which have been put in for clarification, such as that which makes it clear that the House can continue to use its disciplinary procedures unfettered by IPSA. Why not have a clarification in the Bill of exactly what the hon. Lady has just said that she believes that the Bill will do? A great many people, including the learned Clerk of this House, do not agree with her.

Barbara Keeley: We have to be in a situation of clarity[Hon. Members: Absolutely.] Okay, well, we can try to move to that.
	Let me move on to amendment 66. A number of amendments tabled by right hon. and hon. Members concerned the protocol in clause 8, which was actually meant to be helpful. The Justice Secretary and I have been surprised at the extent to which difficulties have been expressed about that, and we are prepared to take it away and to consider it. I wonder whether the hon. Member for North Essex might be prepared to withdraw amendment 66, as it links in with matters of the protocol that we will be considering.

David Howarth: Will the hon. Lady clarify whether the Government's intention is for the protocol to create obligations on the people on the list in clause 8? If that is not the Government's intention, a lot of the problems will fade away when they come to reconsider the matter.

Barbara Keeley: No, it was not the intention to create binding obligations. The provision was expressly limited to a statement about the way in which the bodies would work together. It was meant to be helpful. It will not create binding obligations, but it is clear that Members have concerns about it. A number of amendments in this large group relate to the proposal, and the Justice Secretary has said that we are prepared to reconsider the matter.

Dominic Grieve: I come back to my point about justiciability, about which the Minister must have a view. I believe that incorporating references such as to the protocol or the role of the Standards and Privileges Committee means that the process must be justiciable henceforthcontrary to the previous position under article IX of the Bill of Rights. The Government must have an opinion on that, but the Minister still has not given it to us.

Barbara Keeley: We have said that we are prepared to have a look at the matter. We are going to have to leave it there.
	I have just touched on amendment 66. Amendment 46 is about giving advice to Members, and I hope that the hon. Member for North Essex will accept that we have dealt with that already.

Edward Leigh: The Minister must realise that this is a matter of acute concern. The Bill of Rights has been there for 300 years. It has protected the liberties of our people and made us the most law-abiding democratic nation in the world. Will she now please reply to the point put carefully to her by my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve)? She is replacing the Bill of Rights with a provision that renders matters pertaining to the House justiciable. We must have an answer before we move to a vote.

Barbara Keeley: We do not believe that those matters will be justiciable. Opposition Members have said that they want to reach the later amendments, so we are going to have make progress.
	I believe that we dealt with amendment 46 in an earlier debate, and I turn now to amendments 34 and 18. We have deliberately devised a scheme in the Bill so that the House retains the power to discipline its Members. Apart from the criminal offences in clause 9, the ultimate decision about what action to take against an MP remains with the House. It will be for the House to decide whether to punish a Member for not supplying information or for failing to comply with a direction, and it will be for the House to decide what to do with a recommendation from IPSA for other sanctions.
	We believe that concerns that the provisions are breaches of privilege are misplaced, because they have been carefully drafted precisely to preserve those privileges of the House. The alternatives would have been to make every breach of the rules on allowances or the registration of interests into a criminal offence, or to give IPSA itself a power to enforce its decisions.
	Both options would lead to giving a body outside Parliament far more of an incursion into the proceedings of the House, and would certainly be a breach of the principle of exclusive cognisance. Therefore, I urge the Committee to reject the amendment.

Alan Beith: I think that the Minister is confusing things that involve proceedings in this House and things that do not. The payment of allowances is not a proceeding in this House. It is possible to deal with it through measures that do not impinge on parliamentary privilege. They may give rise to the problem of justiciability, but they do not raise issues of privilege. If the Government recognised that they can deal with pay and allowances without interfering with privilege, they would not have to disapply article IX of the Bill of Rightsas, contrary to what she said earlier, clause 10 does.

Barbara Keeley: There does need to be that independent authority.

Bernard Jenkin: Will the Minister give way?

Barbara Keeley: No, as I am going to work through the rest of the amendments.
	Amendment 19 would omit subsection (6) of clause 8. I have said already that that subsection, on protocol, was meant to be helpful. Clearly, Members are not finding it helpful and we have agreed to look at it again to be helpful as the Bill progresses further through the House.
	Amendment 20 would substitute the Committee on Standards and Privileges for the Speaker's Committee on the Independent Parliamentary Standards Authority in the first line of clause 8(6). That is a sensible thing to do, and we are prepared to accept both that amendment and amendment 21.
	Amendment 64, which is in the name of the hon. Member for North Essex (Mr. Jenkin), would remove the provision in the Bill that makes it clear that the House's powers to discipline its Members are not constrained by the Bill. The point of that provision is to confirm that the House continues to have the freedom to discipline its Members in any way that it chooses, and in any circumstances that it considers relevant. For example, the House will continue to have the power to punish breaches of those parts of the code of conduct that are not transferred to the authority of IPSA. That power is not conferred by the Bill. The Bill, of course, does not give the House permission to exercise its powers; the provision is simply a statement of fact, included for the avoidance of doubt.

Bernard Jenkin: The Minister mentioned the term exclusive cognisance. Can she explain to the House what she means by that, and what she understands by that term?

Barbara Keeley: No. I will not lengthen the debate by that method. Given that amendment 64 is about a simple statement of fact that is included in the Bill, for the avoidance of doubt, I urge the hon. Gentleman to withdraw it. Amendment 67 is, again, on a matter that is linked to protocol. We have decided during this debate that there are a number of matters that should be looked at. We can support the principle behind the amendment, and can look to make some drafting changes as the Bill progresses, if that is acceptable to the hon. Gentleman.
	On amendment 97, we accept the point made about double jeopardy. We definitely need to get the wording right. If we have not got it right, we need to do so, and I hope that the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) will accept the assurance that we will ensure that we get it right. We accept the principle behind amendment 12, and will look at the matter later in the Bill's passage.
	That leaves us with amendment 22. The powers of the House to discipline its Members are inherent in its jurisdictiona point that I made earlierso the powers set out in the clauses are all powers that the House already possesses. There is no suggestion that the powers will be limited in any way in future, or that the list of powers is exhaustive. Nor is there any suggestion that the powers are conferred by the Bill. We are trying to make it clear that we are talking about, and recognising, powers of the House that already exist. Clause 8(10) makes it clear that the range of sanctions that IPSA can recommend include withholding salary, suspension and expulsion. That is a clear indication of the range of sanctions that a Member who has broken the rules might expect to have imposed, including the most serious sanctions.
	We feel that it would be unacceptable if IPSA had the power to recommend sanctions when there was no public indication of what they might be. The public, to whom I keep referring, need to know such things. We feel that that approach best treads the path between responding to public anger and respecting the position of the House. Given my comments on those amendments, I commend clause 8 to the House.

Dominic Grieve: If the Bill goes on the statute book and does not get repealed or altered soon, I think that the Minister's speech in response to the debate will stand as an absolute monument to the way in which the Executive now treat this place. She was unable to answer any of the questions about the maintenance of our independence. The high point of the Government's position was their telling us that their own analysis was that it was more likely than not that our independence would not be undermined as a result of the proposals in clause 8, yet she was unable to provide any coherent argument on why amendment 32 would not improve the Bill.
	As the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) rightly says, let us start moving the process in a direction that provides clarity to the role of IPSA, while protecting our independence in matters that concern the internal discipline of this House and that ultimately touch on the way the House operates. That is the point where justiciability and privilege start to run together. If we could just keep that in mind, the Minister would find there was widespread consensus across the House on the changes that the Government have tried to introduce. Instead, every time we look as though we are about to approach that consensus, we get diverted into a strange, nightmarish regulatory regime that will stand us in endless discredit with the public and undermine our ability to do our job. In those circumstances, I believe that amendment 32 has real benefit, although it is just a small step in the right direction, and I wish to put it to a vote.

Jack Straw: Let me refute what the hon. and learned Member for Beaconsfield (Mr. Grieve) said in an unusually temperate set of remarks. My hon. Friend the Deputy Leader of the House dealt carefully with each amendment. The hon. and learned Gentleman's implication was that we have simply sat here and resisted all the amendments, but he knows very well that that is the reverse of the truth. I am not supposed to talk about this but, as the record of the notes going backwards and forwards between Ministers and the official Box will disclose, what I have sought to do with my hon. Friend is listen to the debate. On a number of occasions, I have come to the Chamber with one view, but I have changed it in the light of debate, which is the purpose of parliamentary debate. There is a legitimate argument to be had about amendment 32, but I have to tell the hon. and learned Gentleman and the Committee that the Bill is not remotely about undermining the independence of the House, something for which I have stood

Alan Beith: It is an unintended consequence.

Jack Straw: Nor is it an unintended consequence. I am ready to accept the amendment that the right hon. Member for North-West Hampshire and my hon. Friend the Member for Middlesbrough have tabled to clause 10. Furthermore, we will continue to examine it, and that will not necessarily be the end of the matter. I recognise the sensitivity of the matter of privilege but, to pick up a point made by my hon. Friend, privilege at its best is not about our privilege but about the privileges of our electors, and through that, the rights of this House. The hon. Member for Gainsborough (Mr. Leigh) is no longer in his place.  [ Interruption. ] I am sorry, he is. I am looking at him; usually, he sits somewhere else. He spoke eloquently on the subject, but we must all understand that the term, which means many things, can also become self-serving. I think it was the hon. Member for North Essex who described it as trust.

Bernard Jenkin: It was not me.

Jack Straw: I apologiseperhaps it was the hon. Member for Gainsborough.

Edward Garnier: The right hon. Gentleman should listen to him more often.

Jack Straw: I listen to him all the time, and I compliment him on what he said. However, there was a breach of trust by the House in the way it dealt with the expenses regime, which is why we are in this mess. Certain consequences, I am afraid, must follow. Second Reading was approved on a vote of 291:1. It was open to the House to vote the Bill down, but it decided not to do so. The measure involves a modification not of privilege as privilege but of powers previously exercised directly by the House. What we are doing, by the authority of the House, if the measure is approved

Edward Garnier: On a point of order, Sir Alan. I wonder whether you would advise me. We are very short of time but we are now having a second Government winding-up speech on the debate. I fully appreciate the fact that the Secretary of State is loyally defending the junior Minister, but he is eating into our time. If we do not debate the Bill properly, we will be roundly accused of not doing our duty.

Alan Haselhurst: I am grateful to the hon. and learned Gentleman. I myself was about to suggest to the right hon. Gentleman that his speech was turning into a Second Reading speech, and was not closely germane to the amendment.

Jack Straw: I will bring my remarks to a close, Sir Alan.
	Certain consequences follow, like night follows the day. If we voluntarily decide to set up the authority, it means that some of the authority's enforcement will be dealt with outside the House.

Mark Durkan: May we return to the most germane point, which relates to amendment 32 and the accompanying amendments 33 and 36? They seem to me to be reasonable, measured and sound. If the House were to reject them, we would be reckless and feckless in doing so.

Jack Straw: I cannot accept the amendments at the moment. I am certainly ready to give them active consideration, but they raise important points of principle.

Dominic Grieve: The time for the amendments is now. It is our one opportunity to make these decisions. Every Member of the House must look to their electorate and to their own conscience as to whether we wish to see our independence disappear for no good reason, when the Bill can be improved to make it workable and do what the public want and what we are required to do.

Question put, That the amendment be made.
	 The House divided: Ayes 234, Noes 274.

Question accordingly negatived.
	 Amendment made: 17, page 5, line 25, at end insert
	'(2A) The Committee on Standards and Privileges may accept, modify or reject as it sees fit a recommendation under subsection (2).'. (Sir Stuart Bell.)
	 Amendment made: 85, page 5, line 31, leave out 'financial interests rules' and insert
	'code of conduct relating to financial interests'. (Mr. Blizzard.)
	 Amendments made: 20, page 5, line 38, leave out 'Speaker's Committee on the Independent Parliamentary Standards Authority' and insert 'Committee on Standards and Privileges.'.
	Amendment 21, page 5, leave out line 43. (Sir Stuart Bell.)
	 Clause 8, as amended, ordered to stand part of the Bill.

Clause 9
	  
	Offences

Dominic Grieve: I beg to move amendment 38, page 6, line 22, leave out subsection (2).

The Chairman: With this it will be convenient to discuss the following:
	Amendment 47, page 6, line 23, after 'member', insert 'intentionally'.
	Amendment 15, page 6, line 25, at end insert
	'(2A) A member of the House of Commons commits an offence if the member intentionally fails to comply with a requirement included in the MPs' financial interests rules by virtue of section 5(8) (declaration of interests).'.
	Amendment 100, page 6, line 25, at end insert
	'A Member of the House of Commons commits an offence if the Member intentionally fails to comply with a requirement relating to the declaration of interests included in the MPs' code of conduct relating to financial interests.'.
	Amendment 39, page 6, line 26, leave out subsection (3).
	Amendment 41, page 6, line 34, leave out subsection (5).
	Amendment 42, page 6, line 36, leave out subsection (6).
	Clause stand part.

Dominic Grieve: We now have to consider the criminal offences that the Government think it right to create and to impose on Members of this House if they transgress. Let me first make absolutely clear something that has been said on many occasions: if Members of Parliament commit criminal offences, no privilege or any other protection should exist in respect of them. There is nothing new about that: it has been the position for hundreds of years. However, the Committee should spend a moment considering whether the offences created in clause 9 add anything to the existing criminal law and whether they will create problems that will be damaging to the way the House operates.
	We have to consider three offences. First:
	A member of the House of Commons commits an offence if the member...makes a claim under the MPs' allowances scheme, and...provides information for the purposes of the claim that the member knows to be false or misleading in a material respect.
	The penalty for that action will be:
	on conviction on indictment...imprisonment for a term not exceeding 12 months or...a fine or...both.
	I have no difficulty with that offence, but I have to say that it sends a very strange message about how we view the criminal law to create an offence specifically for ourselves, and which I assume will therefore be used on Members who transgress in this way, when there already exist in the criminal law at least two, and probably more, offences which relate to exactly the same activity and would attract maximum sentences of seven and 10 years. How can I go back to my constituents and say that the House is taking them seriously when the offence that we have created for ourselves appears to be a much lesser one than that under the general criminal law? I would have thought that the Secretary of State for Justice, with his knowledge of the criminal law, would acknowledge that it is much better that this House should be subject to exactly the same criminal law as would be visited on anybody else who behaved in this way by obtaining their allowances fraudulently.
	There are already two such offences on the statute book: the offence in section 17 of the Theft Act 1968, which is about false accounting and carries a sentence of seven years; and the offence in the Fraud Act 2006, which attracts 10 years' imprisonment. Both fulfil exactly the same criteria as the offence in clause 9(1). The Secretary of State has told me informallyI am sure he will not mind my telling the Committeethat there are differences. Well, there are some minor differences in wording, but as regards what has to be proved against the individual concernednamely, the provision of information in the knowledge that that information is false or misleading, which implies dishonesty on the part of the person concernedI cannot see any distinction, in terms of ease of conviction or otherwise, between the more general offences and this offence.

Edward Garnier: Does my hon. and learned Friend share my surprise at the intervention by the Secretary of State on Second Reading, when he chided me for misconstruing clause 9, which I said, on any view, imputes a test of dishonesty? He said it did not and that was one of the distinctions between it and the Fraud Act 2006. I do not think that he had in mind section 17 of the Theft Act 1968, albeit I am sure that he is a highly experienced criminal practitioner. Does my hon. and learned Friend agree that clause 9(1), if it does nothing else, at least imputes a test of dishonesty?

Dominic Grieve: I agree entirely with my hon. and learned Friend. Indeed, although I know we are supposed to be in a process of general atonement for our misdeeds, if the Government had suggested to me that we ought to have a criminal offence that did not involve a test of dishonesty, I would have suggested to the Secretary of State that prison capacity would have had to be considerably expanded. It is quite clear, as I think the Secretary of State has acknowledged, that MPs can make mistakes, like everybody else. The test of dishonesty is clearly fundamental to the offence.
	As we are having this debate, will the Secretary of State provide the House with some persuasive arguments as to why we should concoct a specific offence for us, identical to other offences that affect the general public, but visited with a sentence that could be one tenth of the maximum duration that someone might get elsewhere? What sort of message does that send?
	The second offence in clause 9 is committed if
	without reasonable excuse, the member fails to comply with a requirement included in the MPs' financial interests rules.
	I do not believe that either that offence or the previous one has any bearing whatever on parliamentary independence, so if the Government wish to have them, they can. In respect of the offence in clause 9(2), however, the Secretary of State needs to provide some explanation of how the reasonable excuse provisions will work in practice.
	Members of Parliament have known for a long time how easy it is to fail to comply with requirements included in Members' financial interests rules, and how that can be done innocently. I wonder whether we are using a sledgehammer to crack a nut. This is a straightforward regulatory offence that we seem in the past to have succeeded in dealing with quite satisfactorily through the sanctions imposed in this House. It is odd that, because the new offence can be visited with only a fine as its penalty, if a conviction were obtained it would not disqualify a Member from serving in this place. I simply ask whether the offence is strictly necessary.

Alan Beith: The hon. and learned Gentleman must read clause 9 in conjunction with clause 10, one of the consequences of which is that if a Member said in a debate, as the right hon. Member for Birkenhead (Mr. Field) did openly yesterday, I do not approve of this legislation, I do not see how it can work and I will probably be subject to an offence under it. If I am, I will not pay the fine and I will go prison, those words could be adduced in court proceedings. Prosecuting counsel could say, You say that this was an accidental mistake, but in fact your own words, as reported in  Hansard, incriminate you.

Dominic Grieve: Yes, the right hon. Gentleman makes a good point, which features in the comments of the Speaker's Counsel, at page 13 of the evidence that he gave to the right hon. Gentleman's Committee, the Select Committee on Justice. I agree that that could give rise to serious difficulties. Whether it touches on the core areas of the House's privilege is an open question, but the Secretary of State will have to answer that point.
	Speaking personally, I do not feel comfortable with the offence under clause 9(2). Apart from anything else, I think it is unnecessary. I am mindful of the fact that the Secretary of State keeps telling the House that we have fallen so low in the public's estimation that unless we make a few rods for own back and go out for some public flagellation, we will never restore their trust. I understand that point, but it is important also that we do not make fools of ourselves. If the problem that the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) identifies were to come to pass, it would have a chilling effect on how MPs express themselves here.

Andrew Dismore: Is not the position compounded by the fact that we effectively have no de minimis rule in relation to outside earnings? The advice that we have had in the Standards and Privileges Committee from the registrar is that if somebody makes a speech and gets a bunch of flowers, they should register it. If they do not, they are potentially in jeopardy. Is it really right that somebody should face a criminal sanction for failing to declare a bunch of flowers?

Dominic Grieve: The hon. Gentleman is right. I intended to discuss that when considering the third offence, which relates to paid advocacy. As I am sure he appreciates, there is some overlap.
	From my reading of the Bill and from evidence given to the Select Committee, I have absolutely no doubt that the offence of prohibited paid advocacy takes us back into the heartland of the House's independence. It is all the more bizarre because, to include the offence in subsection (3), we must drive a small coach and horses through part of article IX of the Bill of Rights.
	A bribery Bill is currently out to scrutiny. In view of the House's current rules, I do not understand how it is possible to commit the offence in subsection (3) without committing an offence of bribery. The Government offered to consult in great detailin fairness, they are doing thatabout how a bribery charge can properly be brought against a Member of Parliament, while not removing the protection of the Bill of Rights for speeches in the House. We have indicated our intention to support that because bribery is a serious offence. What, in those circumstances, is the point of the offence in subsection (3)? If we have only one opportunity to vote, the offence in subsection (3) is perhaps the most important for us to consider. However, I fully accept that the offence for which subsection (2) provides is also important because it could also cause hon. Members difficulties.
	I agree with the hon. Member for Hendon (Mr. Dismore) who said, as I did yesterday, that we cannot consider the Bill without taking into account the infamous regulations, which the House has produced for itself. We acknowledged in the regulations that the boundary between a gift and a benefit in kind is unclear. If a Member of Parliament attends a dinner given by an organisationthe views of which he supports and for which he is promoting legislation in the Housespeaks at the function and does not pay for his dinner, as almost always happens when hon. Members attend such events, he will be in serious difficulty. He will find it difficult to know what to put in the register and whether, thereafter, he is engaging in paid advocacy.
	It will be completely unsatisfactory if, with 20 minutes to go before we get to Report, and the Bill set to leave the House at 7 o'clock this evening, potentially never to return, we do not clear up the problems, given the sword of Damocles that the measure hangs over every hon. Member. My amendments are designed to try to tackle the problems and stimulate debate. Some are probing, but the subject needs to be examined in its entirety. I remain unconvinced.

David Howarth: I am sure that the Government will say, in answer to the point made by the hon. Member for Hendon (Mr. Dismore), that the prosecution has discretion and that trivial prosecutions will not be brought. However, there is a fundamental problem with that because the prosecution service is superintended by the Attorney-Generala Minister. The Government promised to remove that problem by introducing a constitutional renewal Bill, but they have so far failed to do that. We are doing things in the wrong order.

Dominic Grieve: The hon. Gentleman makes an interesting point. There are systems in place for ensuring that the Attorney-General is not involved in prosecutorial decisions about Members of Parliament. After all, Members of Parliament have been prosecuted in the past for other matters. We can therefore overcome that problem.
	However, while trying to be reasonable and respect the Secretary of State's point about showing that we take public anger seriously, we have to ask what clause 9 adds to the system of punishment that might be meted out under existing law for things that we do wrong. Subsection (3) and, to a lesser extent, subsection (2)relating to the two new offencesraise serious and complex issues about how the House goes about its business and whether we can continue to enjoy article IX protection for what we say in the Chamber.

Mark Field: I entirely agree with my hon. and learned Friend about clause 9. However, despite the recent furore, particularly in relation to phantom mortgages, the general public will see that not a single charge has been laid against any Member in relation to either the Theft Act 1968 or the Fraud Act 2006. They may conclude that we therefore need new offences. Will my hon. and learned Friend turn his mind to the rather terrifying prospect that the Government are quite deliberately bringing forward clause 9 in order to place Members of Parliament under a different set of values from that which should apply to the public at large?

Dominic Grieve: I do not think that anything in the Bill will make prosecutions more speedy; indeed, it will make no difference. Prosecutions may arise out of the events that have taken place in the past two months. All that can take place under the existing law.
	As I have said to the Secretary of State, we seem to have had a remarkable capacity in the past 10 years to increase criminality in this country by creating new laws that are duplicatory. My reading of the Government's proposals is that although they vary in their mischief, they are, to all intents and purposes, unnecessary. However, if there is one that the Secretary of State feels particularly passionately about, and if it happens to be clause 9(1), then, although I feel slightly embarrassed about this, because I cannot for the life of me see why there should be a special regime for MPs, I do not think that it will cause any wider harm to the independence of this House. However, the other two subsections raise important issues that the House must consider.

Edward Garnier: I hesitate to disagree with my hon. and learned Friend, but clause 9 is appalling and unnecessary. Just as there is no such thing as a half-pregnant person, so clause 9 is a bad piece of drafting and it is unnecessary. We should have the courage to say so and make clear our views. I trust that the reasonable approach that my hon. and learned Friend has taken would not allow him to reach a false conclusion.

Dominic Grieve: I hope that I am not reaching a false conclusion. I hope that I have highlighted, as best I can, those aspects of the proposals that, in my view, are either silly or have a sinister consequence for the House, which it must consider. Broadly speaking, I think clause 9(1) is a bit sillythat is my reaction to itbut the other two subsections are much more serious. That is a distinction that can properly be made.

Jack Straw: Given the time, I will be as fast as I can.
	First, the hon. and learned Member for Beaconsfield (Mr. Grieve) asked why we were having specific offences whenhe sayssomeone could be charged for any of the three proposed offences under general law. There is nothing unusual about having general provisions with specific parallels for specific purposes; I have plenty of examples, including what is now section 2 of the Fraud Act 2006 and section 17 of the Theft Act 1968, which apply generally to members of the public. The Local Government and Housing Act 1989 and the Social Security Administration Act 1992not our legislation, but the Conservatives' legislationhave specific offences for knowingly making a false declaration. Why did the previous Conservative Administrationin my view correctlymake those offences? It is because in practice it is sometimes easier to prosecute. One can have a jurisprudential argument about the difference between falsely, which involves a clear level of knowledge, and dishonestly, but there is a difference between those offences for which, in practice, it is on the whole easier to prosecute and gain a conviction, and the wider Fraud Act and Theft Act provisions.

Dominic Grieve: Will the Justice Secretary give way?

Jack Straw: Just a second, if I may.
	As for subsection (2), the second limb of clause 9, this House has to my almost certain knowledgewith, if not the support, then certainly the acquiescence of the Oppositionsupported the insertion of provisions concerning the registration of financial interests into the Scotland Act 1998, the Government of Wales Act 1998, the Local Government Act 1972, which is a Conservative Act, and the Local Government and Housing Act 1989, as well as other provisions. As I said to the Committee earlier, what is sauce for the goose needs to be sauce for the gander. The same is true in respect of paid advocacy, with the exception that those offences are rather less onerous than those that the House has imposed on Members of other Administrations.
	The hon. and learned Gentleman, who usually makes good points, made a rather poor point by saying that this clause can apply only to Members of Parliament. Well, the offences that we have imposed on the Scottish Parliament can apply only to Members of the Scottish Parliament and the ones that they imposed on local councils can apply only to local councillors. The hon. Member for Cities of London and Westminster (Mr. Field) suggested with a slight smile on his face that there was some deep dark motive behind the provision, but there is not at all.
	As to the point that the hon. and learned Member for Beaconsfield made about the current code and what I accept are ambiguities in it, these offences would apply only to the new provisions, which would come into force under clause 5, and they would have to be subject to a clear decision by this House and would certainly have to be more clearly defined than the existing provisions.

William Cash: Will the right hon. Gentleman give way?

Jack Straw: I promised that I would give way to the hon. and learned Member for Beaconsfield, and I want to put a final point to him. Without putting words into anyone's mouth and to put it delicately, the hon. and learned Gentleman seems to accept that there was a general acceptance in the all-party talks that some specific offences needed to be in the Bill. There may not have been votes on it, but there was general acceptance of that. He accepts that for each instance there should be an offence but that they should be offences at large. Clause 9(3) deals with cash for questions, which is a rather serious issue. He says that bribery could be charged, which is possible in very serious circumstances; if it is very serious, there is no particular reason why it should not be charged as an alternative offence. I have argued that it is the practice of this House, with different parties in control, to have narrower offences for specific circumstances.
	On clause 10, the hon. and learned Gentleman is right to say that we have been discussing the modification of article IX of the Bill of Rights 1689, so that Members of Parliament can be prosecuted if alleged to be guilty of bribery. My proposal on clause 10 is to accept the amendment in the name of the right hon. Member for North-West Hampshire (Sir George Young), which would broadly bring into line the third limb of the clause relating to proceedings in Parliament with what has already been widely accepted across the House for the bribery provisions.

William Cash: rose

Dominic Grieve: rose

Jack Straw: I give way first to the hon. and learned Member for Beaconsfield and then to the hon. Member for Stone (Mr. Cash).

Dominic Grieve: If the Secretary of State looks back at the Scotland Bill, he will findmy memory goes back that farthat I was very concerned about ensuring that the Scottish Parliament had proper sovereignty. I remember expressing concerns about the criminal offences, as I raised the question of whether they should be left to the internal regulation of that institution. That is my first point. My second is that the Fraud Act 2006 was not in existence then and it commanded widespread support in the House for simplifying the fraud law. I have here the particulars of an offence relating to the charge of fraud, which could be that a person between a day and another day dishonestly and intending to make a gain for himself failed to disclose to IPSA what he was under a legal duty to disclosehe was double-claiming an allowance. That is all one has to prove. In those circumstances, I am afraid that I simply cannot accept the Secretary of State's contention that the new offence under subsection (1) will be easier to prove.

Jack Straw: The hon. and learned Gentleman makes a lawyer's point about section 2 of the Fraud Act 2006 not being around at that stage, but he knows very well that section 16 of the Theft Act 1968 was.

William Cash: The right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) raised a question earlier about the connection between clause 9 and clause 10 and asked whether clause 10 would impede the body created from taking appropriate action against a Member. The Clerk said no, it would not, and that was reinforced by the Speaker's Counsel, so on what basis does the Justice Secretary take the view that they were wrong?

Jack Straw: I do not take the view that they were wrong, but there is self-evidently a difference of emphasis on whether they are right, and we are trying to resolve that.
	I am conscious of the time.  [Interruption.] It is the responsibility of the Government, but I can still be conscious of it. It may be helpful, however, if I explain that we judged clause 10 to be necessary to the independent operation of IPSA. For the time being, we want the amendments tabled by the right hon. Member for North-West Hampshire in the Bill, but I am ready to sit down with Members on both sides of the House and see whether we can secure a better answer.

Alan Beith: rose

Jack Straw: I will take one last question.

Alan Beith: I am grateful to the Secretary of State, because this is a crucial point. Surely he accepts that it is not necessary to disapply the Bill of Rights in order to deal with expenses and pay, because they are not part of the proceedings of Parliament, and that because it is possibleand not necessarily difficultto prove bribery or even paid advocacy without making use of proceedings in Parliament, the Bill of Rights need not be disapplied in that instance either.

Jack Straw: I am very grateful to the right hon. Gentleman and his Committee for their report. As he will know, there is a serious difference on that issue between independent jurists herethe Clerk of the House and his colleaguesand senior parliamentary counsel.
	Why would I want to pursue an unpopular clause unless it was felt to be necessary? [Hon. Members: The Prime Minister told you to.] No, no. To be blunt, it has not featured on the Prime Minister's radar at any stage. [Hon. Members: Oh!] The Bill has, butI draw a veil over the operation of the Prime Minister, but the idea that he has been worrying about clause 10 of this Bill when he has me to worry about it is nonsensical.

Dominic Grieve: Will the Secretary of State give way?

Jack Straw: I will not, because I know that the hon. Member for Moray (Angus Robertson) wishes to speak.
	I assure the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) that we will sit down and go through what he has said about clause 10. However, let me return to my point about the Bribery Bill. There is general acceptance that prosecuting a Member of Parliament for bribery will necessitate a carve-out of elements of the Bill of Rights, and we are trying to replicate that by means of the amendments tabled by the right hon. Member for North-West Hampshire. I do not consider that the Committee should be unduly exercised, given its position on the Bribery Bill. I think that I have made my points.

Angus Robertson: I am pleased to be able to contribute, although time is running out. I want to speak to amendment 100, which was tabled by me and by my colleagues in the Scottish National party. I welcome the inclusion of criminal sanctions for Members of Parliament who break the rules, and I thank the Justice Secretary for including not just the three United Kingdom parties but all parties in the House in the preparatory meetings.
	The Justice Secretary rightly said that the offences included in the Bill had emerged from earlier legislation applying to local government, the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, and drew our attention to offences involving the Register and involving advocacy. However, he failed to mention that an additional criminal sanction is included in the Scotland Act 1998, which, as far as I am aware, was not opposed by any members of the Conservative, Labour or Liberal Democrat parties during the passage of that Bill. It relates to the issue of declarations of interest. That is the gold standard. The Justice Secretary said that what was good for the goose was good for the gander, and I entirely agree with him. If we are seeking to emulate the gold standard, I believe that we also need to include a criminal sanction for people who do not fulfil the requirement for a declaration of interest.

Alan Duncan: There is a crucial difference between declaration and registration. Declaration means an oral declaration, so a Member could end up being criminal simply by not saying anything in the House. Registration is now possible on the internet. A wide and comprehensive arrangement covers all the necessary registrations of interest, and implicitly covers declarations as well.

Angus Robertson: I am grateful to the shadow Leader of the House for explaining his view, but I do not agree with him: there is a difference between registering and declaring an interest. Just because we have access to Google in our offices does not mean that when we are attending a debate we should not hear whether a Member has a significant interest to declare.
	I wish to draw the attention of Members to the key word in our amendment, because there has to be reasonableness, as people can occasionally forget to mention things. The key word in the Scottish National party amendment is intentionally. That provides a safeguard that should assuage any concerns that any Members of any parties might have.
	I do not need to speak to this issue at great length. The House has already passed it as a criminal sanction to apply in legislatures elsewhere in the United Kingdom. What is good for the goose is good for the gander. We should include it as a criminal sanction in this Bill. I shall wish to press the amendment to a Division at the appropriate stage, and I appeal for the support of Members in all parts of the House.

Edward Garnier: I wish to clarify a point that I made in an intervention on my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve). I said that he had reached a false conclusion; perhaps I ought to have said that he had reached an illogical conclusion. The logic of his argumentit is an argument with which I agreeis that if we disapprove of clause 9, we should say so and understand the consequences of having said so. It strikes me that the points that my hon. and learned Friend made in relation to the Fraud Act 2006 and, for example, section 17 of the Theft Act 1968 are unassailable. No one who has had a look at the relevant statutes and then compared them with clause 9(1) can reach any conclusion other than that we are creating a law for Members of Parliament who commit fraud which is special and lenient and different from that which applies to ordinary members of the public. I take the viewit may be thought to be rather old-fashionedthat the common law should be universally and uniformly applied. If someone is a crook, they are a crook regardless of whether they are a Member of Parliament or a butcher, a baker or a candlestick maker. I do not understand the motives behind the Government's inclusion of clause 9(1).
	I fully endorse the criticisms made in relation to the new criminal offences under subsections (2) and (3). There are other professionslawyers called to the Bar, solicitors, architectswhere perfectly acceptable disciplinary rules apply that are dealt with by their disciplinary bodies, and where those who break them are not required to go to prison or to be fined. Just because we are in a lather about expenses does not mean that those who are guilty of contravening the rules of the House or of IPSA should be treated in such a way. The rules of IPSA are yet to be defined and set out; we do not know what rules clause 9(2) and (3) refer to, because they have yet to be written under the provisions of clause 5. We are creating yet more criminal laws. We have created about 3,500 new criminal offences since 1997 through 65 criminal justice laws, and here we have another one, and yet we do not know its detail.
	If we are going to create new laws, we should know what they look like; the Bill should say what they are, but it does not. It is intellectually deficient, lazy and inept not to do so. If we think we are doing ourselves a good turn by appealing to the public by doing this, I suggest we are wrong. As my hon. Friend the Member for Rutland and Melton (Alan Duncan) said, eventually somebody will be brought before the courts, or at least the relevant authorities, and be prosecuted for failing to declarewhether by accident or not does not matter at present. We need to anticipate this. We need to think about it. This is a thoughtless clause in a thoughtless Bill, and I urge the Government to think againor to think at all.

Dominic Grieve: I wish to withdraw amendment 38 and put amendment 39 to the vote, as I think that amendment goes to the heart of the issues we have to consider because it concerns paid advocacy and its impact on the Bill of Rights and the independence of this House.
	 Amendment, by leave, withdrawn.
	 Amendment made: 86, page 6, line 23, leave out from 'included' to the end of line 25 and insert
	'by virtue of section 5(7) (registration of interests) in the MPs' code of conduct relating to financial interests.'. (Mr. Blizzard.)
	 Amendment proposed: 100, page 6, line 25, at end insert
	'A Member of the House of Commons commits an offence if the Member intentionally fails to comply with a requirement relating to the declaration of interests included in the MPs' code of conduct relating to financial interests.'. (Angus Robertson.)

Question put, That the amendment be made.
	 The House divided: Ayes 63, Noes 286.

Question accordingly negatived.
	 Proceedings interrupted (Programme Order, 29 June).
	 The Chairman put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Programme Order, 29 June, and Standing Order No. 83D).
	 Amendment proposed: 39, page 6, line 26, leave out subsection (3). (Mr. Grieve.)
	 Question put , That the amendment be made.
	 The Committee divided: Ayes 160, Noes 344.

Question accordingly negatived.
	 Amendment made: 87, in clause 9, page 6, line 27, leave out from 'included' to the end of line 28 and insert
	'by virtue of section 5(10) (prohibition on paid advocacy) in the MPs' code of conduct relating to financial interests.'. (Mr. Blizzard.)
	 Clause 9, as amended,  ordered to stand part of the Bill.

Clause 10
	  
	Proceedings in Parliament

Amendments made: 23, page 7, line 8, after 'evidence', insert
	'of words spoken by, or any other conduct of, a Member of the House of Commons in proceedings in Parliament'.
	Amendment 24, page 7, line 8, leave out 'a' and insert 'that'. (Sir Stuart Bell.)
	 Question put, That the clause, as amended, stand part of the Bill.
	 The House divided: Ayes 247, Noes 250.

Question accordingly negatived.

Gerald Howarth: On a point of order, Sir Alan. Notwithstanding the splendid outcome of that Division, which surely represents the passion of the House on this matter and is a serious affront to the Justice Secretary, I believe that it is a constitutional outrage that a clause described by the learned Clerk as possibly having
	a chilling effect on the freedom of speech of Members
	has not had a moment's debate in this Chamber. If it was not for right hon. and hon. Members having voted against the clause by three votes, despite the Government Whips' attempts to stop them, we would not be able to debate it.

The Chairman: Order. I think that the hon. Gentleman has got away with quite a bit thereon a point of order that is not strictly so. He knows that I cannot respond to that.

Alan Beith: On a point of order, Sir Alan. I wonder whether I might give you notice that I am very happy that my amendment on Report, amendment 16, now falls, because it was an amendment to leave out clause 10. I hope that the Justice Secretary, rather than treating the situation as an affront, will take it as a recognition that the primary purpose of the Bill did not require clause 10, that we can set up the necessary body without it, and that he should now get on and do so to the general satisfaction of the House.

The Chairman: I assure the right hon. Gentleman that the necessary changes to the order of selection will take place on Report.

Dominic Grieve: Further to that point of order, Sir Alan. I appreciate that we are about to embark on the Report stage of the Bill, but considerable consequences, in the form of consequential amendments, might flow from the disappearance of clause 10. We are about to embark on the process that will result in the Bill's leaving this House in about an hour and 20 minutes' time. Have you had any notice of a statement from the Secretary of State about how the Government wish to proceed with this legislation, in view of what has happened?

Jack Straw: rose

The Chairman: I call Mr. Jack Straw.

Jack Straw: Further to that point of order, Sir Alan. It is fair to say that you have not had notice of such a statement, because we have only just learned of the decision of the House, by 250 votes to 247. Of course, I understand the concerns of the House. We will respect the decision.  [Interruption.] The Opposition Chief Whip is supposed to be silent, as he knowsthat is what he is paid for.
	I say to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) that although we will not be able to do so on Report, we will take full account of the decision of the House in the consequential amendments in the other place.

The Chairman: The Secretary of State said that he had no notice of the situation; no more did I. I am sure, however, that our advisers will ensure that we do everything in order henceforth.
	 The Deputy Speaker resumed the Chair.
	 Bill, as amended, reported.

William Cash: On a point of order, Mr. Deputy Speaker. In 1993, Speaker Boothroyd gave a warning that, in respect of article IX of the Bill of Rights, the courts should not interfere in the proceedings of the House. New clause 7 deals with article IX of the Bill of Rights and new clause 8 deals with the supremacy of Parliament. They go to the very heart of how we are governed in this country. Some 40 Members of Parliament have signed the new clauses, which are, furthermore, in the name of the official Opposition. Against that background, may I ask for your ruling on how it can be that those two new clauses have not been selected for debate, as a result of which the House has been put in peril?

Mr. Deputy Speaker: The hon. Gentleman is a very experienced Member and he knows that no explanation is given for the selection of amendments. I did not participate in the decision, and there is nothing that the Chair can say. It is customary for the selection to be made and for the House to accept the consequences. Whether there will be further opportunities in the course of proceedings on the Bill is another matter. I cannot go further than that.

Bernard Jenkin: Further to that point of order, Mr. Deputy Speaker. Without wishing to ask you what the rationale might be, I speculate that aspects of the Bill

Mr. Deputy Speaker: Order. The hon. Gentleman is also a very experienced Member, and he is not going to get away with that.
	 Consideration of Bill, as amended in the Committee (Programme Order of 29 June)

New Clause 1
	  
	Data controller

'The IPSA shall become the data controller for the purposes of the Data Protection Act 1998 two months after the day this Act is passed.' (Alan Duncan.)
	 Brought up, and read the First time.

Alan Duncan: I beg to move, That the clause be read a Second time.
	I wish to make reference to the significance of what we are doing in creating the Independent Parliamentary Standards Authority in terms of the law that will affect us and our expenses under the Data Protection Act 1998. Very simply, one of the most important elements of the Data Protection Act is who is responsible for holding the data and therefore who is responsible for answering freedom of information requestsand ultimately, I suppose, for making decisions along the lines of what is published and whether it has to be redacted and, to our great embarrassment, how.
	The Bill will set up IPSA, but it remains unclear when responsibility for controlling and holding the data will pass to it. It is obviously absurd to assume that that responsibility can pass on the day that the Bill receives Royal Assent, because the apparatus to handle it will simply not exist. It therefore makes good sense, in order to have an orderly transition, to try to specify a date on which the baton of responsibility is passed from this House to the new independent body, perhaps with an enormous collective parliamentary sigh of relief, leaving it to others to decide how data relating to our expenses can be handled, published and released.
	The new clause suggests that there should be a period of two months between the Bill receiving Royal Assent and the date on which the responsibility should formally pass. It is a very simple, uncontroversial proposal. If, for any reason, the Government believe that it should be, say, three months, we would not argue strongly about that. However, the principle of making it absolutely clear when this House relinquishes responsibility for the administration of our expenses is essential if we are to avoid more of the calamitous coverage that we have suffered from over the past few weeks.
	I merely ask the Minister to tell the House whether the Government are prepared to accept the new clause, in whole or in principle. Depending on the reply, we can either decide to withdraw it, and perhaps let the other place table another one, or to press ahead with it.

Robert Smith: The hon. Member for Rutland and Melton (Alan Duncan) makes an important point about the transition of responsibility and clarifying when and how it happens. The Government's reply may deal with the practicalities of whether two months is the appropriate period. I agree with him that the Government should explain how they plan to do this and when, and make it clear, perhaps in another place, exactly what the date should be.

John Redwood: One of the many muddles that the Bill is getting Parliament into is the muddle over how staff will transfer and when the body will be established. I am pleased that my hon. Friend the Member for Rutland and Melton (Alan Duncan) has tabled this new clause suggesting some clarity over the data controller aspect. However, it is not possible to put a time on when that could take place unless we know how long it will take to set up the body and to appoint all the relevant staff.
	I hope that the Justice Secretary will use this opportunity to say something to our staff, who are in need of reassurance or some statement from their employer about how they are going to be treated. Does he know when the Bill might be enacted? Is it possible that we can do this quickly, perhaps within two months? It will be easier to do it if the current arrangements for staff transfer, under the Transfer of Undertakings (Protection of Employment) Regulations 1981 or some similar arrangement, apply and if staff have been told that they will transfer so that the system can continue much as it has up to this point. If that is not the intention, a good employer would warn staff and start consulting on what the arrangements will be, and it might be quite difficult to hit this particular deadline.
	Although I welcome the spirit of my hon. Friend's new clauseit is right that we need clarity over the data protection aspectsI am worried about the general issue of whether this body can be set up quickly and whether the Justice Secretary thinks that its staffing arrangements will be more competent and better than those that we currently have, and, if so, why he thinks that. Above all, he owes to our staff, nowit should have been done some time agoproper procedures for informing and consulting them.

Peter Bone: My right hon. Friend talks about the time question, but should the change not be delayed until after Sir Christopher Kelly reports? Otherwise, we could have a complete fiasco with what he says.

John Redwood: Yes, and some of us made that point in previous debates, when it was more relevant. The relevance of timing here, which I am sure my hon. Friend had in mind, is that the new clause is about the timing of part of the transfer of duties. As he and I are trying to point out, the duty cannot be transferred until the body has been set up and is working. We need to be satisfied that it is working competently and sensibly.
	There are a lot of people involved, and the way in which they have been treated is shoddy and appalling. I am sure that if it had happened in the private sector, the Government would have been jumping up and down complaining and asking whether things had been done properly. I hope that we will have a statement on the matter, and that the new clause will give us an opportunity to probe a little more how all the arrangements for a smooth transfer will be put in place if the Government are determined to carry on with the establishment of this quango.

Mr. Deputy Speaker: I have to announce to the House the result of a Division deferred from a previous day on the Question relating to environmental protection. The Ayes were 269 and the Noes were 196, so the Ayes have it.
	I shall also announce the result of a Division deferred from a previous day on the Question relating to the summer Adjournment. The Ayes were 254 and the Noes were 212, so the Ayes have it.
	I shall also announce the result of a Division deferred from a previous day on the Question relating to notices of questions etc. during September 2009. The Ayes were 465 and the Noes were 3, so the Ayes have it.
	 [The Division lists are published at the end of today's debates.]

Edward Garnier: It is a matter of regrettable record that in the past 18 months or so, this House in its various guises has been in dispute with the Information Commissioner about applications in relation to the Freedom of Information Act 2000, the keeping of our expenses records and so forth. That has led to matters being taken to the High Court on two occasions, at considerable public expense. None of usor at least only a very few of us, and I was not one of themwas asked for our view on that matter, but we are now none the less staring at the consequences of the High Court's decision.  [Interruption.] It is interesting how one gets conflicting instructions from time to time. I say to my hon. Friend the Member for Blaby (Mr. Robathan), Relax, mon brave.
	That having been said, I wonder whether the Secretary of State, or whichever Minister is to respond to this very short debate, will be able to tell me whether they or any other arm of the Government have communicated with the new Information Commissioner to see how he is approaching the Bill. For example, I wonder whether he has a view about whether the Independent Parliamentary Standards Authority should become the data controller for the purposes of the Data Protection Act 1998.
	I entirely agree with the thrust of the points that my hon. Friend the Member for Rutland and Melton (Alan Duncan) made, but we need somebody to deal with the matter. Unless that is explicit in the Bill, it will cause unnecessary confusion. If we are not very careful, we could get into the same sort of difficulty as we did in the past.

Jack Straw: I am grateful to the hon. Member for Rutland and Melton (Alan Duncan) for raising this matter. It may help if I explain how the Data Protection Act 1998 and the Freedom of Information Act 2000 will work in respect of the new authority.
	Section 1 of the Data Protection Act defines a data controller as
	a person who (either alone or jointly or in common with other persons) determines the purposes for which and the manner in which any personal data are, or are to be, processed.
	Whether someone is a data controller is not a matter of election by that individual but is subject to an objective test. When IPSA is determining the purposes for which, or the manner in which, any personal data that it holds are to be processed, it will become a data controller. I am grateful to the hon. Gentleman for raising the matter, but I hope that he will accept that the new clause is not necessary.
	The new clause mentions two months. On Second Reading, which seems two years ago, but was only two days, several stirring victories and one defeat ago, I gave an undertaking about the likely time scale. I suggested that, with the likelihood of Sir Christopher Kelly's recommendations being available in October, and taking account of the time for running a competition to appoint the senior people to the authority, for the authority then to appoint a chief executive and for the transfer of staff, which the right hon. Member for Wokingham (Mr. Redwood) raised, we are aiming for Sir Christopher Kelly's proposals, and the new authority, to start operating on 1 January next year. It is not remotely likely that the authority will be up and running in two months. Assuming that we get Royal Assent by the end of July, that would mean establishing the authority by the end of September.
	I therefore hope that the hon. Member for Rutland and Melton (Alan Duncan) accepts that the first part of the new clause is unnecessary and the second is not achievable. Apart from that, it is fine. It has provided an important platform for a useful debate.
	Under clause 14, clauses 12, 13 and 14 come into force by statutory instrument, and different days can be appointed for different purposes. That is standard form, so the exact time at which the authority comes into force depends on when it is ready. I should also point out that that, like the Bill, this will be the formal responsibility of the Leader of the House, because the measure is essentially a creature spawned by the House, not by a Departmentalthough I have been delighted to play my role in ensuring that it is improved, as it has been.
	As the hon. Member for Rutland and Melton will recall, paragraph 27 of schedule 1 and paragraph 10 of schedule 2 provide that IPSA and the commissioner become public authorities for the purposes of the Freedom of Information Act 2000; the House has agreed that. Those provisions will come into force when the authority has some information that will make it the subject of FOI requests. That will happen as soon as it becomes operational. I hope that that helps, and that the hon. Gentleman will therefore be willing to withdraw the new clause.

Alan Duncan: I am grateful to the Secretary of State for his comments. I suppose that I was trying to make a plea for the appointments not to take so long that the authority does not assume responsibilities until early next year, because in the meantime we will have the rag ends of another year's published receipts. If there is an unclear grip on that process because of the transition of the responsibilities from the House to the new authority, that is likely to compound the problem.

Jack Straw: I am grateful to the hon. Gentleman for allowing me to intervene, because now that we are no longer in Committee I cannot speak twice except with the leave of the Chair. I simply want to say that we aim to make progress as fast as we can now that we have had Second Reading and Committeetaking account, of course, of possible further change at the other end of the building.

Alan Duncan: I therefore beg to ask leave to withdraw the clause.
	 C lause, by leave, withdrawn.

Clause 4
	  
	Dealing with claims under the scheme

Jack Straw: I beg to move amendment 7, page 3, line 13, at end insert
	'(7) The scheme may provide for an allowance to which a member is entitled under the scheme to be paid to another person at the member's direction; and references in this Act to the payment of an allowance to a member are to be read accordingly.'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendments 8 to 11.
	Amendment 2, in clause 13, page 9, line 24, leave out from 'section' to end of line 25 and insert
	'shall not be made unless a draft of the instrument has first been laid before, and approved by a resolution of, the House of Commons.'.
	Government amendments 12 to 15.

Jack Straw: Colleagues will find Government amendment 7 on page 1059 of the Order Paper. It makes it clear that although allowances relate to a Member, money under allowances can be paid to somebody else, which may include our staff or those with whom we contract.
	Government amendments 8, 9 and 10 are relatively minor, and I commend them to the House. As for Government amendment 12, the hon. and learned Member for Harborough (Mr. Garnier) will recall that he asked whether a serving member of the senior judiciary could be appointed. We are now making that clear in the Bill, and I am happy to oblige.
	Government amendments 13, 14 and 15 will require the Speaker, rather than IPSA, to lay the relevant notices and orders before the House, which is important. That is consistent with, for example, the arrangements in respect of the Boundary Commission. As the Secretary of State for Justice, I am the conduit for orders from the Boundary Commission for changes to boundaries, but I am required to lay the order before the House and ensure that it is put to a vote. Our amendments square the circle, in that there has to be a sponsor for the provisions, namely the Speaker, but they have to come before the House. However, what it does with those orders is entirely a matter for the House.

Dominic Grieve: I welcome the Government's amendments. Government amendment 7 clearly reflects the comments that were made on an earlier occasion about the reality of how our allowances work in this place. Amendment 12, which takes on board the concerns that were expressed about members of the judiciary, also seems sensible.

Iain Duncan Smith: Does my hon. and learned Friend not agree that amendment 7 is a classic illustration of what happens when we try to rush such legislation through? That such a basic reality had been missed in the original drafting makes one's jaw drop at the bad legislation that we are now witnessing.

Dominic Grieve: I agree entirely with my right hon. Friend. At some point in the next hour, we may or may not get Third Reading. However, the reality is that the Bill in its present form is incoherent and filleted. It will have to be put back together again, but it is extraordinary that that will happen in another place. Yet again, a Bill that intimately concerns this House will, at the end of the day, leave this House in a form in which it could never go on the statute book. If ever there was a lesson to be learned about the failings of our procedures, which, as has rightly been said, are just as important as any other failings in our allowances in diminishing the standing of this place, it is that. Although I welcome the one or two amendments that we are dealing with to tidy things up, the truth is that we are tidying something up that, at the moment, is a hovel of a piece of legislation. A great deal will have to be done to it before it is inflicted on the world outside.

Robert Smith: I welcome the fact that we have at least some time on Report in which to see some improvements and acknowledge some of the requirements that arose in Committee. However, I share the concerns of others that the Bill has not been properly scrutinised in this House and will need to be dealt with in the other place.

George Young: I am grateful for Government amendment 7, which reproduces, at 10 times the length, the four words that I had drafted as amendment 6 to clause 4 yesterday. I want briefly to speak to amendment 2, in the hope that the hon. Member for Middlesbrough (Sir Stuart Bell) and I might score a final quick single before stumps are finally drawn.
	The order-making power in clause 13 is wide ranging and substantial. It provides for the Government and the Speaker to draw up a scheme for transferring property rights and liabilities of the House to IPSA and for the order containing such a scheme to be subject to annulment by either House of Parliament, which may or may not lead to a debate and a vote.
	As drafted, the clause is objectionable on two grounds. First, it does not guarantee proper scrutiny of such orders; secondly, it gives the other place power to annul a scheme that affects only this House. The amendment tabled by the hon. Member for Middlesbrough would deal with both objections by requiring all orders containing transitional provision to be laid in draft before the Commons only and by making them subject to the affirmative procedure order, thus obliging the Government to make time available either on the Floor of the House or Upstairs to provide the opportunity for a vote to take place. I hope that the amendment will find favour with Government Front Benchers.

Alan Beith: Amendment 7 is obviously necessary, but I am afraid that it will never be sufficient to disabuse sections of the press of the view that MPs claim, personally collect and leave in their bank accounts a wide range of allowances for constituency office rents and staff wages. Numerous newspaper stories still appear implying that those allowances, which are actually transferred to other people, are for the personal profit of the Member. I have often thought that a similar analysis of the salary of the editor of a newspaper that attributed to him the wages of that newspaper's staff and the rent of the building would produce similarly bizarre effects. I am glad that the Government have realised that direct payment is a valuable part of the system.

John Redwood: I want to highlight Government amendment 9, which the Justice Secretary did not explain. It is interesting because it strikes out lines 5 to 7 on page 8, which define
	the Leader of the House of Lords,
	as meaning
	the Minister of the Crown who is for the time being designated as Leader of the House of Lords by the Prime Minister.
	I presume that the reference to the Leader of the House of Lords is being knocked out because it might be thought inconvenientfor reasons of privilege and their lordships' interestto have any reference to the Lords when the Bill goes to the other place. That leads one to question the original intent. It looks to me as if the drafting suggested that the Lords should be covered, but the reference is being struck out quickly from the Bill before it goes to the other end of the corridor.

Jack Straw: Let me explain that this relates to the definition clause and particularly to the tenure period for members of IPSA and the commissioner. It was agreed without argument across the Chamber that the commissioner or members of the authority could be removed only on the basis of an address from both Houses of Parliament, but there was a restriction on how that address could get on to the Floor of either House: it had to be moved either by the Leader of the House of Commons or by the Leader of the House of Lords. We agreed to take that out. That being the case, and with no substantive reference to the Leader of the House of Lords anywhere else in the Bill, the definition could be dropped as completely redundant. That is the reason for the change.

John Redwood: It is useful to have elicited that explanation and have it put on the record before the Bill goes to the other place, but I rest my case. The original intention was that both Houses should be covered. We are now assured that that is not the immediate intention, and I trust that this issue, which might be of considerable interest in the other place, will be teased out further in any debate there.
	 Amendment 7 agreed to.

Clause 5
	  
	MPs' financial interests rules

Amendment made : 8, in page 3, line 38, leave out subsection (9). (Mr. Straw.)

Clause 7
	  
	Investigations

Bernard Jenkin: I beg to move amendment 6, page 4, line 33, at end insert
	'(1A) Any investigations under this section shall be deemed to be proceedings in Parliament as expressed in the Bill of Rights 1689, notwithstanding any other provisions of this Act.'

Mr. Deputy Speaker: With this it will be convenient to discuss the following: amendment 4, page 4, line 42, at end add
	'( ) Subsection (4) does not apply where the Commissioner finds that the member who was the subject of the investigation complied fully with the Members of Parliament allowances scheme and with the code of conduct relating to financial interests as they relate to that investigation.'.
	Amendment 3, page 5, line 1, leave out 'IPSA' and insert 'Commissioner'.
	Amendment 1, in clause 13, page 8, line 45, leave out subsections (5) and (6).

Bernard Jenkin: I shall be extremely brief. The amendment is, very logically, an extension of the principle of removing clause 10 from the Bill. This is to make sure that investigations under clause 7
	shall be deemed to be proceedings in Parliament as expressed in the Bill of Rights 1689, notwithstanding any other provisions of this Act.
	All I would add is that the Parliamentary Commissioner for Standards operates under that principle at the moment. This is independent regulation, but operating on the same basisthat the investigations should be privileged. The provision also guards against double jeopardy. I urge the House to support it.

Alan Beith: This is precisely the sort of amendment that needs measured and leisurely consideration. Although I am sympathetic to it, I am not convinced that it is the right way to achieve the objective of the hon. Member for North Essex (Mr. Jenkin). I shall be interested to hear the Government's response.
	Having entered that proviso, let me also say what an unusual delight it is to see an amendment of mine carried before its even being reached.

Stuart Bell: I wish to speak to amendment 1, which I tabled.
	It was never expected that the Bill would be retrospective, but it is important for us to put the question of allowances behind us, and it is important for the Bill to assist in that procedure. I can tell the House that the review of allowances that has been authorised over the last four years has been put in train, that the House of Commons Commission, with the approval of all party leaders and Members on both sides of the House, has begun its work, and that the terms of reference have been agreed. Sir Thomas Legg is the distinguished chairman of the review body; his independence is absolute and sacrosanct, and must be seen to be so by the public. The review will cover four years of receipts, and it will be minute and thorough.
	My amendment is intended to remove any prospect, should it exist, of a further review. I believe that a sword of Damocles would have been held over each and every Member if retrospection had operated, whether rightly or wrongly. It has been suggested to me that there might be a gap between the authority's taking over and Sir Thomas Legg's review, and that a mishap in the intersticesperhaps relating to misbehaviourmight not be brought to the attention of the new body, which might cause a vacuum in the proceedings. As we know, however, the Committee on Standards and Privileges is still there, will continue to be there, and can exercise its own authority and powers should anything fall within those interstices.

David Heathcoat-Amory: It seems to me that amendment 6 is affected by the decision to remove clause 10, which means that, as we understand it, the Bill of Rights 1689 will apply. The amendment would ensure that any investigations under clause 7 were deemed to be proceedings under that Bill. It occurs to me that the commissioner may not be able to conduct his investigations, because he constitutes a body outside Parliament.
	The Bill states that proceedings in Parliament, which will now include the investigations under clause 7, cannot be
	impeached or questioned in any court or place out of Parliament.
	It seems to me that the commissioner, and indeed IPSA, will constitute a place out of Parliament, because, unlike the Committee on Standards and Privileges or the Parliamentary Commissioner for Standards, they will be independent and outside the jurisdiction of Parliament. That is the whole point of making them independent, and that may reinforce the case for retaining a central role for the Committee on Standards and Privileges, which, being a parliamentary body, can quite properly investigate proceedings that take place in the House.

Iain Duncan Smith: I do not want to interrupt my right hon. Friend's train of thought, but, having been a member of the Committee that introduced the Committee on Standards and Privileges, I have yet to hear from anyone that there is an urgent need for the arrangement to be changed. I know that we are not specifically discussing the case in question, but I have yet to understand that any other than the Leader of the House's opinion believes that the punishment should have been harsher. Other than that, I am aware of no one in the media who is saying, If only we had some other system that is tougher than this one, and none of my constituents have written to me to say that. This system is generally accepted to be reasonable, fair and, at the right moments, harsh on those it needs to be harsh on.

David Heathcoat-Amory: I am grateful for that intervention because that is exactly my experience. We have all been on the receiving end of a great deal of criticism about the expenses regime, and it is essential that we reform that quickly, but, like my right hon. Friend, I have not received any criticism that the House Select Committee on Standards and Privileges is not doing, and has not done, its job well. The Committee and its Chairman, my right hon. Friend the Member for North-West Hampshire (Sir George Young), have to my knowledge never been criticised for having pulled their punches at all when Members have had to be disciplined. Despite that, we are transferring a large part of these duties to the new Commissioner for Parliamentary Investigations.
	We will have two commissioners; we have discovered that during the course of our debates on the Bill. My point is that the new Commissioner for Parliamentary Investigations will be outside Parliament. Therefore, according to the Bill of Rights, he will be a place out of Parliament. If I am wrong on that, I will be happy to be corrected.

Alan Beith: I understand the position to be that the commissioner will be unable to adduce proceedings in Parliament in pursuit of a matter relating to Members' interests, and will therefore find himself concentrating on the expenses issue, which is the primary reason for creating this body in the first place. It would be illogical to leave Members' interests matters with the standards committee. They can, of course, be looked at without reference to proceedings in Parliament; indeed, it is often possible to do so.

David Heathcoat-Amory: That is a helpful intervention. I have no objection to the new commissioner looking into matters of expenses, which is the subject of most of the controversy, if he really is essential, but, as the right hon. Gentleman said, he will also be looking into other matters. To do that, he will have to look into our debates and reports of what has happened in our Committees, and that will be prevented by the Bill of Rights.

Patrick Cormack: I entirely agree with the points my right hon. Friend is making, but is he aware that the next business is the sunset clause, and it is crucial that we get on to that?

David Heathcoat-Amory: Well, I slightly resent that intervention actually, as I think this is an important matter. Although I do not intend to speak at length, I do think we need answers to some of these questions. We have not had many answers during this debate. I am fully aware that there are other matters to be decided, however, and I am sure they are important, too.
	This Bill is a complete muddle. We are stumbling forward without any idea of the consequences of what we are doing. I may be wrong, but I would like some light to be shone on this complicated matter before we proceed.

Andrew Dismore: Amendments 4 and 3, which offer the only opportunity to raise the lack of a right to appeal, deal with issues relating to procedure and the setting of those procedures. I do not want to repeat at length what I said on Second Reading, because that would be going back over old ground, but I think it is important to recognise that there is no right of appeal for any Member in this process. If we are going to start looking at having outside regulationwhether through the commissioner setting his own process or, as the Bill stands, through IPSAto whom can a Member appeal? If amendment 4 passes, a report will not have to be made.
	The Government argue that the Bill is compatible with the right to a fair hearing because IPSA is independent, but my Committee report tagged to the debate does not accept that in respect of IPSA's functions, the rules devised, the procedural safeguards designed and the various investigation and enforcement powers. All that adds up to saying that IPSA is not an independent and impartial tribunal as required by article 6 of the European convention on human rights. Lord Bingham, in his evidence to the Joint Committee on Parliamentary Privilege said:
	I am always rather uneasy if any decision by anybody, however wise and authoritative, is final and immune from any challenge, and therefore the reason why I think it would be desirable to have a route of challenge available is simply to eliminate that situation.
	That was just one point that he made; it was not the full quote. He went on to say that the way to deal with this matter would be to have a right of appeal from the House to the Judicial Committee of the Privy Council. I had tabled an amendment to that effect, but that was, unfortunately, not reached because of the guillotinethat is another example of the problems that we have been experiencing.
	If an outside body is to carry out our regulation and we are, thus, trying to externalise all this, we must have the same protections as any other professional body in those circumstances. Until recently, the General Medical Council and the General Dental Council both had rights of appeal to the Privy Council for matters resulting from their determinations. That position has changed slightly, but the Judicial Committee of the Privy Council has developed expertise in determining such matters. It has learned to use this power sparingly and appropriately, and it would therefore be appropriate to consider that body as an option. The Judicial Committee of the Privy Council already has a role in determining whether a Member of the House is subject to a statutory disqualification under section 7 of the House of Commons Disqualification Act 1975, so no great new principle is involved. What I am proposing would simply mean that if a Member is subject to disciplinary proceedings, they, like anybody else in the outside world, would be entitled to due process. Part of that involves the right of appeal, which is simply not provided for in these provisions.

Dominic Grieve: I, too, wish to see the House move on as quickly as possible to the sunset clause, but the points raised by my hon. Friend the Member for North Essex (Mr. Jenkin) merit consideration. In the vote that we have just had, whereby clause 10 was removed from the Bill, the Committee made it transparently clear that whatever regime is set up to deal with our finances and allowances externally, it cannot and must not infringe article IX of the Bill of Rights. I therefore hope that the Secretary of State, in his reply to even this short debate, will assure us that the Government recognise what the Committee was saying in that decision and will ensure that whatever is put together in the House of Lords to rebuild this Bill will be done in a way that achieves that objective.
	I say that because although we have removed the clause that said that the Bill of Rights does not apply, we have not secured anything that expressly says that it does apply. I hope that the Secretary of State will, in the spirit of the vote that took placethe Committee was trying hard to reach a consensusindicate that he fully appreciates what that message was. It is clear that it is possible to have a regulatory regime in which our allowances and salaries are dealt with externally to this House without intruding on the Bill of Rights. That can happen only if the Secretary of State is prepared to re-examine clauses 7, 8 and 9some other areas may also need to be examined in a bit of detailin order to ensure that what is put together conforms with the protection that the Bill of Rights affords to our independence, and freedom of speech and action.
	Without that, we will end up having further arguments when this Bill returns from the House of Lords. Although the Bill is not in a fit state to go on to any statute book anywhere as it goes now to the House of Lords, I am pleased that the way in which it is going there gives the other place a perfectly clear indication of what it must do to put the Bill right. I hope that the Government will co-operate in this process. Mindful of that, I hope that when the Secretary of State responds to the points that have been made, particularly those raised by my hon. Friend the Member for North Essex, who has performed such a sterling role in the passage of this Bill, he will provide the assurance that he recognises that the Bill of Rights will not be infringed upon by this legislation.

Jack Straw: I shall go through the various points that have been raised. I can first tell my hon. Friend the Member for Middlesbrough (Sir Stuart Bell) that we will accept amendment 1, which removes subsections (5) and (6) from clause 13. There was never the least intention to make the Bill retrospective, but as anxiety about that has been expressed, I am happy to clarify the point.

Stuart Bell: Notwithstanding the short time available for this Bill, my right hon. Friend has been most understanding and given it his best shot. I am sure that the House will join me in appreciating his acceptance of various amendments.

Jack Straw: I am grateful to my hon. Friend for those words.
	Amendment 6 was tabled by the hon. Member for North Essex (Mr. Jenkin)Essex is a fine county. Ironically, for those of us involved in the cross-party conversations, it was originally suggested that there were two ways to handle the issue of privilege as far as IPSA and the commissioner were concerned. I leave aside the issue of evidence of paid advocacyhow to deal with obtaining evidence when a charge under clause 9(3) is being pursuedfor the moment. As far as the other two limbs of what was clause 10 are concernedit is, of course, now deadthe original proposal was that we brought IPSA and the commissioner into the ring of privilege, and it was drafted to that effect. At that stage, there was no market for that because, as we were trying to create a body independent of Parliament, it might look as though we were trying to have our cake and eat it by providing that statutory and arm's length body with privileges and even immunities that did not apply to any other body. That was dropped in favour of carving privilege out of the operation of IPSA and the commissioner.
	I endorse the words of the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith). We do not rule out the proposal in amendment 6indeed, it was in play at one point. I see the hon. and learned Member for Beaconsfield (Mr. Grieve) smiling in agreement. However, it will require some thought. Although we are anxious to get the Bill throughthat is certainly the explicit commitment of the Government and the Liberal Democrats and, by implication, of the ConservativesI hope that the hon. Member for North Essex will join me and others to consider it. Contrary to the myth that this is some kind of supine Parliament, Parliaments since 1997 have been more assertive of opinion in the House against the Government of the day than any other. There is good research evidence to that effect from the professor of politics at Nottingham, whose name escapes me at the moment.

Dominic Grieve: The Justice Secretary heard what I said earlier, and I hope that he will be able to give some comfort to the House, especially as we are about to lose control of this Bill. If it were to go through the Lords without amendment, it could go on to the statute book and it would be incoherent. That could happen. Can he confirm that the will of the House to get rid of clause 10 is fully understood by the Government and will be respected?

Jack Straw: I shall come to that. There was serious anxiety in the House. I feel frustrated, although I know that it is one of those things. We are trying to get the Bill through, and there is heavy pressurethis applies to Governments of all descriptions, but it just happens to apply to this Government at the momentand there was no time to debate clause 10. I fancy that my powers of advocacy would have been sufficient [ Interruption. ] I know that the Government are to blame for the fact that there was not time, but I am making the point that I hope that my powers of advocacy would have been sufficient to have persuaded three people to vote the other way, had I had the opportunity.
	Of course, we will consider amendment 6, too. However, on a point on which I was engaging the right hon. Member for Berwick-upon-Tweed [ Interruption. ] This is in answer to the hon. and learned Member for Beaconsfield. Of course, I respect the view of the House, but I also want there to be an overall scheme that is workable and effective [ Interruption. ] May I have the hon. and learned Gentleman's attention, since he asked the question? Clause 10 said:
	No enactment or rule of law...is to prevent
	that is, article IX will not prevent
	the IPSA from carrying out any of its functions
	or
	the Commissioner from carrying out any of the Commissioner's functions.
	The House is very clear, and one way through it is to do the reverse, which is what the hon. Member for North Essex proposed and it is something that we, too, considered.
	The third limb of the clause concerned
	any evidence...being admissible in proceedings against a member of the House of Commons for an offence under section 9.
	Let me simply put a point before the House for considerationwe all have to think about this. The exact issue has arisen in the past in respect of bribery. When the matter was considered by a Joint Committee on the issue of bribery some time ago, it was agreed that Members of the House of Commons or House of Lords should not be exempt from prosecution for bribery and that, in certain cases, the only evidence might be what they had done in the House of Commons.
	In order to get a bribery Bill on to the statute book, the issue is being further examined by the Joint Committee on the draft Bribery Bill. We have put forward a draft Bill, copies of which are available in the Vote Office. Clause 15 proposes that article IX of the Bill of Rights is not to prevent
	any evidence of...words spoken by a member of either House...or...any conduct of such a member in such proceedings...being admissible in proceedings against the member for a bribery offence or in related proceedings.
	I would have accepted the amendment tabled by the right hon. Member for North-West Hampshire (Sir George Young), which would, essentially, have put the third limb of clause 10 into that form.
	Of course, I understand what the House has said, but there is also a serious issue. There is an argument between those on the two Front Benches about whether clause 9(3), which is the paid advocacy clause, is needed. As I understand it, there is no argument but that paid advocacy should be the subject of criminal proceedings.

Dominic Grieve: I want to get on, but I think that I made the position quite clear. I see paid advocacy as bribery and the draft Bribery Bill provides the perfect vehicle for dealing with that and for ensuring that Members of Parliament are not exempt by virtue of the Bill of Rights. It seems to me that what was clearly stated in the way in which the Committee voted to get rid of clause 10 was that, for the purposes of the regulation of the House and any criminal offences that might be thought to be relevant, the Bill of Rights would continue to apply. I think that if the Secretary of State tries to do something else in the other place, he will find, in the light of that vote, that he will face serious difficulty.

Jack Straw: On the regulation of the House, I accept what the hon. and learned Gentleman has said. However, the whole House needs to think about consistency with clause 15 of the draft Bribery Bill. There is a serious issue to think about. If such a provision is in the draft Bribery Bill and the House's wish is for there to be a bespoke offence, that offence will have to be in this Bill in some form or other.

Alan Beith: The Lord Chancellor should keep in mind the advice of Speaker's Counsel, which was that the law on corruption in this country does not require a person to prove that a corrupt design was carried out, but to show only that it was entered into. Such a demonstration does not require the consideration of proceedings in the House.

Jack Straw: Everyone who has looked at the issue of bribery has accepted that there has to be a provision similar to what is in clause 15 of the draft Bribery Bill. That has been accepted across the House, and approved by it. I hope that that is a useful explanation.

Bernard Jenkin: I am grateful to the Secretary of State for not really advancing a single argument against my amendment 6. I am bound to say that he does not look that unhappy about the loss of clause 10. I see no need to press the amendment. I am grateful for his assurance that he will look at the matter. I beg to ask leave to withdraw the amendment.
	 Amendment, by leave, withdrawn.

Clause 12
	  
	Interpretation

Amendment made: 9, page 8, line 5, leave out lines 5 to 7. ( Mr.  Straw.)

Clause 13
	  
	Power to make transitional etc provision

Amendments made: 10, page 8, line 36, leave out paragraph (c).
	Amendment 1, page 8, line 45, leave out subsections (5) and (6).
	Amendment 11, page 9, line 24, leave out from 'section' to the end of line 25 and insert
	'may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.'.
	Amendment 2, page 9, line 24, leave out from 'section' to the end of line 25 and insert
	'shall not be made unless a draft of the instrument has first been laid before, and approved by a resolution of, the House of Commons.'. (Mr. Straw.)

Clause 14
	  
	Short title and commencement

Alan Duncan: I beg to move amendment 5, in page 9, line 39, at end add
	'(4) This Act and any Statutory Instrument made under this Act shall cease to have effect on the first anniversary of the day on which the Act is passed.'.
	We might get a little squeezed in the Third Reading debate, so may I take this opportunity to extend the usual courtesies to the Secretary of State and his staff? We on this side of the House have sat through many discussions over the past few days and we are very grateful for the courtesy and reasonableness with which the right hon. Gentleman has treated us and entered into those discussions. It has been an exemplary way of handling what has been a difficult and controversial Bill. We and others believe that it has been hurried through but, given all those pressures, we could not have asked for more courtesy and reasonableness in the manner of its handling.
	Colloquially, this amendment is a sunset clausea notion often discussed in this House, but insufficiently and rarely applied to legislation. Variations of the amendment were used for emergency powers granted by the House to deal with issues such as terrorism. It is a very sensible instrument for any piece of legislation that is unduly controversial and which may have unforeseen consequences.
	This is such a Bill. There can be no doubt that it has been hurriedly cobbled together, and perhaps even more hurriedly rushed through this House. It is very rare to have Second Reading, Committee and Report on three consecutive days. A Bill of this magnitude and consequence will have effects that none of us will have been able properly to understand, even after the vigorous debate that we have enjoyed. It therefore makes good sense to put a natural expiry date on it, so that in a year or so the House is required to come back and take a look at how it has worked.
	There may be court cases, changes in the behaviour that we can display in the House, and effects on right hon. and hon. Members, and possibly even our staff, that we have not envisaged. It is simply sensible and uncontroversial to allow us to look at the Bill in the cold light of day after it has been in place for a year, and so inevitably after there has been a general election. Nothing could be worse than making bad law and letting it lie on the statute book. The surest way of making sure that bad legislation comes back before this House is to make its return automatic by passing a sunset clause. Thereby, if the Government of the day wish to renew the Bill, believe that it has been of value and is working, or believe that it should be amended, the Bill can be started again, have its sunset clause triggered, or be brought back for amendment.
	I urge the House to do something that it always says it would like to do, namely agree to a sunset clause. Let us do it and just see how it works, so that the Bill, which is likely to be agreed to, can come back in a year's time, and we can see whether the House looks upon it as we have done this week.

Mark Durkan: The hon. Member for Rutland and Melton (Alan Duncan) has made the point that sunset clauses are familiar to the House because they have been used in legislation dealing with emergency provisions in terrorism situations. Of course, one of the reasons that legislation is deemed to be temporary is that it is hoped that the conditions and requirements demanding the legislation are temporary. Sunset clauses have been used in various bits of Northern Ireland legislation during the peace process, as institutions were established, different arrangements were put in place, and safeguards were introduced that it was hoped could later be disposed of. Sunset clauses were inserted in the hope that the circumstances and environment would change so the law would not have to remain permanently on the statute book, and there would not have to be a full Act of repeal.
	The situation that we are discussing is very different. I do not think any of us believe that the fundamental credibility question, and the issue of having independently verified and monitored standards in relation to parliamentary expenses and financial probity, will pass or be temporary. We are not talking about just a wee 2009 affair, courtesy of  The Daily Telegraph; the situation goes deeper than that, and we are kidding ourselves if we think we can deal with that in a sunset clause. We are in danger of undermining the authority and standing of IPSA if we say we are setting it up on approval for a year. We have already inserted parliamentary control into an awful lot of what IPSA does.

Edward Garnier: If the Act is good, we will re-pass it. If it is not, we will not.

Mark Durkan: That is what the hon. and learned Gentleman says, but when is another matter. Let us be clear: we have already made sure that the involvement of Parliament has been inserted into all sorts of controls, checks and brakes in relation to the conduct, performance and investigations of the authority. Earlier, I referred to the conundrum of the There's a hole in my bucket, dear Liza syndrome; IPSA is independent, but parliamentary sovereignty is asserted over it.

Peter Bone: rose

Mark Durkan: I want to finish and let other Members speak. The situation is something of a hologram. We are saying that IPSA is independent, but for other purposes we are saying that there is parliamentary control. We are also saying that IPSA will have a shelf-life of one year, and if we do not like what it does, we can dispose of it completely. How we are meant to recruit people of competence and credibility to the authority on that basis I do not know. With a sunset clause, there is the danger that we might be saying, This is temporary for a year. It could change next year. Do Members of this House want to fight a general election on the issue of expenses and how they are managed and controlled? That would be a very dangerous virus to come into a general election campaign. That is the danger of a sunset clause.

Iain Duncan Smith: I intend to be very brief indeed.
	I completely disagree with the hon. Member for Foyle (Mark Durkan), as I cannot understand how anyone in the House would want to deny it the right to revisit legislation. That runs contrary to the whole point of being elected, so I hope that he has time to rethink his comments.

Mark Durkan: Will the right hon. Gentleman give way?

Iain Duncan Smith: No, the hon. Gentleman has had his turn.
	I support my hon. Friend the Member for Rutland and Melton (Alan Duncan), who moved the amendment, and I hope that the Lord Chancellor will look at it carefully and understand why we need it. The measure worked perfectly well in the Prevention of Terrorism Act 2005, as we were able to make sure that we constantly revisit legislation we may have concerns about.
	We have rushed the Bill through. We would not need the sunset clause if we had not done so. We are now seeing clauses knocked out at the last moment, and promises made across the Floor of the House that in the other placethe unelected Chamberchanges will have to be made. That is not right. The hon. Member for Nottingham, North (Mr. Allen) made a powerful speech, in which he talked about our taking control of the affairs of the House. What we have shown in the past two days is that we are not fit to take control of anything, because we would rather have an unelected House do our work for usthat work is relevant to us, not to themwhich is absurd. The reason for the sunset clause is clear: we need to revisit the measure in time to make sure that any mistakes can be rectified.
	The problem is absolutely clear. It is simply that our expenses system has been abused and is weak, but we could change it in short order. We did not need a series of major changes to our rights, responsibilities and privileges, cobbled together on the back of that requirement. What has happened, on the whim of the Prime Minister, is that we now have this extraordinary Bill, which is ill-thought-through and liable to major change in another place. Surely the purpose tonight is not to be party political. The purpose [ Interruption. ] People may laugh about that, but this is not party political. If the hon. Gentleman had an iota of courageand he does not need to look at me like that, because I voted against my Government on many occasionsinstead of sneering he would vote for the amendment, knowing that he voted for those who come after him to take control of this place. Surely this is the point: let us make sure that we have a chance to revisit the measure, and overturn it if necessary.

Jack Straw: I was not sneering at the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith). [Hon. Members: He meant the hon. Member for Wirral, West.] Okay, but I was chuckling at him, because there was a disconnection between his invective against the Prime Minister and what he said in his next breath about this not being a party political issue. I agree that it should not be seen as a party political issue, and I remind the House that all three party leaders backed the establishment of a parliamentary standards authority.  [ Interruption. ] Okay, that was the view of the Leader of the Opposition, and it was also the view of the leader of the Liberal Democrats.

Lynne Jones: I would have attempted to intervene on the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), as I wholeheartedly agree with his point that the House is constantly abrogating our responsibility adequately to scrutinise legislation and sending it to the other place to do the job for us. That is even more pertinent when it comes to a Bill that relates to the regulation of Parliament. I hope that my right hon. Friend will address that issue, because the way the Government guillotine such legislation is a disgrace.

Jack Straw: First, there is good evidence in a Modernisation Committee report from two years agothat evidence came from the Clerks of the Housethat it is a myth that this House spends less time on legislation than the other place does. It is simply not true.  [ Interruption. ] Well, that was the implication of what was said. Secondly, on the insufficiency of time, I personally have always been in favour of the House sitting late, but

Gerald Howarth: Will the right hon. Gentleman give way?

Jack Straw: No, I will not.
	It is the House itself that has been in favour of not going late, as Members have been anxious to get away. That is the constant pressure on our Whips. It makes no difference to Ministers. I would have been happy, as would our Whips, to have debated the Bill at some length.

Several hon. Members: rose

Jack Straw: Others wish to speak, so I must deal with what is proposed. I endorse entirely the remarks of my hon. Friend the Member for Foyle, who has been consistent in saying in the Chamber what he said in the privacy of the cross-party talks, which has not always been the case with others who took part in those talks. If the Opposition are serious about endorsing the principle and backing the establishment of a parliamentary standards authority, I have to say they know nothing about establishing organisations if they put a question mark against the future of that authority within just a year of its establishment.
	Many legitimate issues have been raised about the future of the staff of the Fees Office who are to be transferred to the authority. We must provide them with security. What conceivable security would they have if they faced the clear promise that the Act would cease to have effect on the first anniversary of the day on which it was passed?

Alan Duncan: Very nice try, but it does not wash. As someone who has run organisations and set them up, I appreciate that the Secretary of State is quite right to say that the staff need some sort of continuity, but we are considering not just the staff but the significance of the legislation that we are passing. It is not the independent fees office that is in any way controversialthe Secretary of State is right; we all support that; it is all the surrounding implications for privilege and so on that matter, and they may well need revisiting. Doing so in no way threatens the stability of the independent fees office that the Bill sets up, and which should be the only thing it sets up.

Jack Straw: That is not what the amendment says. It does not provide an opportunity to revisit the Act. It states:
	This Act and any Statutory Instrument made under this Act shall cease to have effect on the first anniversary of the day on which the Act is passed.
	Let us say that we get Royal Assent by 31 July, and the body gets going, with staff being transferred, on 1 January. Seven months later, it ceases to have effect. That is an extraordinary idea.

Several hon. Members: rose

Jack Straw: I shall give way in a moment.
	I accept entirely that the hon. Member for Rutland and Melton (Alan Duncan) has set up and run organisations. I know that that is true. He knows very well that it would be impossible to recruit anybody at any level if they were told, The certainty is not only that you're going to lose your job, but that the firm is going to be wound up within seven months of your coming in.

Robert Smith: The purpose of a sunset clause is to recognise the urgency of the legislation. Because it has been expanded and rushed through, it needs to be properly scrutinised and checked. By rushing it through now, we can get started and address the immediate problem of the expenses and transferring it to an external organisation, but with the sunset clause in place, the Government could introduce proper legislation in the autumn, with plenty of time in both Houses for it to be properly scrutinised and fully implemented.

Jack Straw: The better way of handling the burden of what the hon. Gentleman says is for all parties to commit themselves to monitoring the legislation carefullyI certainly do, on behalf of my partyand ensuring that adequate time is provided for any amending legislation that is needed, which could be in a single Bill or as part of a second Bill.

David Winnick: Will my right hon. Friend give way? If a sunset clause were agreed to, would there not be a cynical feeling among the public, which the Opposition refuse to accept, that we were setting up the authority because of the scandal and the way the House has been brought into disrepute? Surely no one denies that. The public would say, If the new body is too effective, Parliament will do away with it. We have learned the lesson with Elizabeth Filkin, who was a very effective Parliamentary Commissioner and was dismissed because she did her job too well.

Several hon. Members: rose

Madam Deputy Speaker: Order. I realise there are many people wanting to speak.

Jack Straw: I accept entirely what my hon. Friend says on that point. Although there are real preoccupations for this House about how this House operates, we need to remember that the reason we are introducing the provision for IPSA is that weourselves, collectivelyfailed to self-regulate. The idea that we put the issue back on the agenda by adopting this, I am afraid, really rather silly amendment is ridiculous.

Robert Smith: In the brief time that is left, I want to associate Liberal Democrat Members with the thanks to the Secretary of State and his staff for the way they

John Redwood: On a point of order, Madam Deputy Speaker. As the Justice Secretary has said that he likes to sit later, and as we need a lot more time to do this Bill justice, can we have a motion now to go on until 10 o'clock?

Madam Deputy Speaker: I am operating under the existing programme motion, and there is no opportunity for me to change it.

Patrick Cormack: Further to that point of order, Madam Deputy Speaker. Do you realise that there is a seething anger in this House because we have no time for Third Reading at all? This is a Bill of monumental importance, and the only reason we are debating the current clause is that it has been rushed through. Is there something you can do? Can I move a motion, and will you accept it?

Madam Deputy Speaker: While we are debating these points of order, the clock is ticking away. I have already ruled that there is nothing I can do to change the matter.

Robert Smith: Despite the controversy and mishandling, I want to place those thanks on the record, because there has been quite a lot of movement and communication, and it has helped the Bill to become a bit betterbut not perfect. It is definitely still in an unworkable form.

Alan Beith: While my hon. Friend is offering thanks, I wonder whether he will allow me to encourage him to thank the two Committees that have contributed to these debates, and the Members and staff who have made that possible.

Robert Smith: Had my right hon. Friend not intervened on me, those two items would have been next on my list. Those thanks stand on the record; I shall not bother repeating them. However, those Committees have made a huge difference to informing the House and to the Bill's progress.
	As I said to the Secretary of State, there is a consensus among the vast majority of those in the House that putting out to an external authority the handling of Members' expenses, finances and salaries is a very necessary way to restore public confidence in this country's body politic. It was a crucial part of the Bill and a crucial reason for its urgency. However, the Bill expanded like Topsy and got into an awful muddle as the Government bolted on extra aspects that have had to be removed. That has made it much more unworkable, and means that it needs to be revisited and properly scrutinised.
	The Bill will go to the other place, which we hope will do a good job in trying to improve it, but putting the onus on the Government by introducing a sunset clause so that they knew the Bill had to be revisited would concentrate their mind. In the autumn we would be able to come forward again with the full scrutiny of effective legislation, fully worked out, so that we had a permanent solution that dealt with all the concerns that have been raised in this debate. I urge the Government, even at this late stage, to accept a sunset clause.

Andrew Tyrie: There are three good reasons why we need a sunset clause. First, as the Secretary of State said, this is emergency legislation, and emergency legislation should generally carry a review or a sunset clause. Secondly, the Government have themselves published guidelines with which to judge whether Bills or regulations should have sunset clauses. On the list of criteria deemed to be particularly appropriate for sunset clauses, there is
	regulation responding to a particular crisis or to political and public pressure.
	I cannot think of anything more apposite to describe the need for a sunset clause. Indeed, the Secretary of State used the word pressure only a moment ago.
	The third reason, which we all know about because we have been sitting here for three days, is that the Bill is in a thoroughly shoddy state and needs to be fundamentally reviewed. It will not be properly done in a few weeks in the other place; we will have to do it ourselves in a year's timehopefully, when my party is in government.

Patrick Cormack: This is a monstrous Bill, which has been pushed through with indecent haste. If we had taken the proper time, we could have had a decent Bill that dealt with expenses but did not interfere with Parliament's rights and privileges. This is a black day for Parliament, and I urge the House to support the sunset clause so that at least we can try to put things right in a year's time.

Question put: That the amendment be made.
	 The House divided: Ayes 225, Noes 284.

Question accordingly negatived.
	 It being after Seven o'clock,  The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Programme Order, 29 June, and Standing Order No. 83E).

Schedule 1
	  
	Independent Parliamentary Standards Authority

Amendments made: 12, page 10, line 12, leave out 'holds or has held' and insert 'has held (but no longer holds)'.
	Amendment 13, page 16, line 3, after 'and' insert 'the Speaker must'. (Barbara Keeley.)

Schedule 2
	  
	Commissioner for Parliamentary Investigations

Amendments made: 14, page 19, line 3, after 'and' insert 'the Speaker must'.
	Amendment 15, page 19, line 5, leave out 'On laying' and insert 'When the Speaker lays'. (Barbara Keeley.)
	 Third reading
	 Motion made, and Q uestion put, That the Bill be now read the Third time.
	 A Division was called, but no Members being appointed Tellers for the Noes, the Deputy Speaker declared that the Ayes had it.
	 Question accordingly agreed to.
	 Bill read the Third time and passed.

saving gateway accounts bill (programme) (No. 2)

Motion made, and Question put forthwith (Standing Order 83A(7)),
	That the following provisions shall apply to the Saving Gateway Accounts Bill for the purpose of supplementing the Order of 13 January 2009 (Saving Gateway Accounts Bill (Programme))
	 Consideration of Lords Amendments
	1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement at this day's sitting.
	 Subsequent stages
	2. Any further Message from the Lords may be considered forthwith without any further question being put.
	3. The proceedings on any further message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement. (Mr. Watts.)
	 Question agreed to.

Saving Gateway Accounts Bill

Consideration of Lords amendments

Mr. Deputy Speaker: I must draw the House's attention to the fact that privilege is involved in Lords amendments 1 and 2. If the House agrees to these amendments, I shall ensure that the appropriate entry is made in the  Journal.

Clause 3
	  
	Transfers

Sarah McCarthy-Fry: I beg to move, That this House agrees with Lords amendment 1.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendment 2.

Sarah McCarthy-Fry: Lords amendments 1 and 2 would make all recipients of carer's allowance eligible for the saving gateway. The issue was discussed in detail during the Bill's previous stages in this place, and I am particularly grateful to my hon. Friends the Members for South Thanet (Dr. Ladyman) and for Leeds, East (Mr. Mudie) and the hon. Member for Taunton (Mr. Browne) for raising it. In response, the then Economic Secretary said that the Government were minded to table amendments in the other place [Interruption.]

Mr. Deputy Speaker: Order. Perhaps hon. Members who are not taking part in the debate will leave the Chamber quietly and let us get on with our business.

Iain Duncan Smith: On a point of order, Mr. Deputy Speaker. I understand that the statement is now due to follow the business that we are considering. I wonder whether the Speaker has taken it into consideration that, during earlier points of order about the Government's not coming to the House to discuss the nationalisation of a particular rail franchise and our having to wait for the statement to be made in the other place first, the Leader of the House was signalling to him, for all to see, that the statement would not be made at 7 o'clock, as he proposed, but at 5 o'clock. We had no statement at 5 or at 7 and we still await it.
	Could you also tell me, Mr. Deputy Speaker, whether, now that the Speaker has had time to read the transcripts from the Today programme, which I know he has in his possession, he or anyone in the Chair plans to make a clear criticism of the Government for their failure to come here before announcing a programme of nationalisation on the radio?

Mr. Deputy Speaker: Perhaps I could deal with those matters in reverse order. On the second point, it is not for me to try to explain to the right hon. Gentleman what the Speaker has in mind. The statement will made later this evening, and the Chair has played no part in that decisionthe Government are producing the statement.

Sarah McCarthy-Fry: As I was saying, the Government intended to table amendments in the other place, and my noble Friend Lord Myners did that at the first opportunity. I should like again to place on record our thanks to all those with caring responsibilities. We will continue to do all we can to help and support them, and I am glad that we have been able to find a mechanism to do that while staying within our original policy objectives.
	As hon. Members know, the saving gateway is targeted at working age people on lower incomes. As the then Economic Secretary explained, carer's allowance can be claimed by anyone aged 16 or older, as long as they meet the various requirements, and there is no upper age limit. Indeed, 375,000 of the 880,000 claimants are of pension age. Making everyone who is entitled to carer's allowance eligible for the saving gateway would extend eligibility to a large number of people from outside our target group.
	We have therefore looked for a more targeted option. The amendments would make those receiving carer's allowance eligible for the saving gateway, rather than everyone who is entitled to receive it. Even without the amendments, around 225,000 claimants of carer's allowance would be eligible for the saving gateway through qualifying benefits. The amendments will add a further 300,000 carers to that number, taking the total to more than 500,000. I commend the amendments to the House.

Mark Hoban: As the Minister said, the issue has been discussed at length in the Commons. The Government's late conversion to the cause may come as a surprise to those who took part in the debates in Committee, as the then Minister did not greet the probing amendments that were moved with any great enthusiasm. Indeed, she used some of the statistics that the Minister has now used as a reason not to extend the scheme to carers. That said, we should not be too churlish when the Government listen to the views of hon. Members in all parts of the House, so we welcome the measure.
	The only omission from the Minister's remarks was any indication of the cost of extending eligibility to people in receipt of carer's allowance. It would be helpful for the House to know the additional financial commitment that has been entered into as a consequence of the Government's accepting the Lords amendment.

Jeremy Browne: I rise briefly to thank the Minister for accepting the amendment, which was tabled in my name in Committee. We support the overall principle of the Bill, which is to give people of working age on very low incomes greater opportunities and incentives to save, and the benefits that will flow from that. Our feeling was that carers as a group were worthy of consideration. I am therefore grateful to the Minister for slightly belatedly accepting the merits of that argument, which, as the hon. Member for Fareham (Mr. Hoban) said, it would be churlish not to recognise as a positive development.
	Although I am minded to support the amendments, because their origin is those that I and others put forward in Committee, I, too, would be curious to know their estimated financial costs. However, unless the amendments are prohibitiveI assume that they are not, because the Minister does not appear to regard them as suchwe would be enthusiastic in supporting them.

John Redwood: When we last considered the Bill, I asked the Minister to tell us what interest rate would be made available and how much good news there would be for savers under the scheme. Absolutely no information was forthcoming, so I hope that she will be able to supply it now that we are extending the scheme, because given the people to whom we are extending it, we want to ensure that it would be valuable to them and worth their attention.
	It is absolutely typical that such a proposal should come forward with no costing, no regulatory impact assessment and no comment from the Minister about why the scheme might take off and why it might help the people whom we would all like to help. I am afraid that, yet again, we are seeing an appallingly bad standard of work.

John Gummer: Can my right hon. Friend imagine any company on earth that would make a proposition without properly costing it and without the shareholders and the board understanding what they were letting themselves in for? Why are the Government totally unable to understand the basic rules of economics?

John Redwood: I quite agree with my right hon. Friend. We would like the scheme to work, because we agree with the broad aim and we would like to assist people who could qualify under it, but throughout the process Ministers have been completely wooden. They will not tell us who will introduce the scheme, how much the fees and costs will be, what the interest rate would be if it were launched today or how much the amendment will cost, because they clearly do not know whether the scheme will be popular and take off. Indeed, how can they know that if they have done none of the homework on whether the scheme makes sense for the people concerned?
	Indeed, if the Government are not careful, they will be guilty of mis-selling, because one cannot come to a conclusion about whether the proposed scheme is a suitable savings scheme for people on low incomes and benefits unless one knows the answers to some of the questions that I and others have been putting. Therefore, at this late stage, can the Treasury and the Minister redeem themselves by giving the House some information so that we can willingly approve the scheme and know that it might do some good?

Sarah McCarthy-Fry: I am grateful for the comments of the Opposition Front-Bench spokesmen, who said that they thought that the Bill was a good measure. By my reading of  Hansard, the idea was that we would find a mechanism to bring carers of working age into the schemeand we believe that we have done so.
	I was asked how much the amendments will cost. We estimate that they will make an additional 305,000 people eligible for the saving gateway, which will cost about 4 million in 2012-13, falling to about 1 million in a steady state. That will not affect our overall estimates of the numbers eligible for the scheme or its costs. We have always said that we expect about 8 million people to be eligible for the saving gateway; previously, our exact estimate was 7.7 million, which the amendments will increase to 8 million. The change will not impact on the cost estimates of the scheme, which have been rounded to the nearest 10 million. Those therefore remain at 130 million in 2012-13, 110 million in 2013-14, 100 million in 2014-15 and 60 million in steady state.
	I hope that we can all agree that we have found a mechanism to bring carers of working age into the scheme, and I also hope that all will welcome that.
	 Lords amendment 1 agreed to , with Commons privileges waived .
	 Lords amendment 2 agreed to , with Commons privileges waived .

Clause 4
	  
	Requirements relating to accounts

Sarah McCarthy-Fry: I beg to move, That this House agrees with Lords amendment 3.

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendments 4 to 8.

Sarah McCarthy-Fry: The amendments achieve three separate things, which I shall set out in turn. First, Lords amendments 3, 4 and 5 relate to the maturity period of the saving gateway accountsin other words, how long each account will last. As hon. Members will know, we intend to set the maturity period at two years or 24 months. These amendments would prevent regulations from setting a maturity period of less than 12 months. It was suggested in the other place that a maturity period of less than a year would not encourage saving, as it would not be long enough for saving gateway account holders to develop a strong savings habit.

Mark Hoban: Given that the regulations are intended to have a maturity period of two years, why are the Government tabling amendments in the Lords to restrict that maturity period to 12 months? Why not have the primary and secondary legislation instead?

Sarah McCarthy-Fry: We cannot foresee a period in which a maturity period of less than 12 months would be desirable, which is why we are setting the bar at 12 months. That does not prevent the period from being longer. As I said, we envisage setting the maturity period at two years, but the regulations put the minimum bar at 12 months because we believe a lesser period is not sufficient to encourage the saving habit.
	Lords amendment 6 is intended to correct a minor error in drafting. The Bill provides that the Northern Ireland social security commissioner will hear certain saving gateway appeals on non-tax matters in Northern Ireland. Clause 25(7)(b) originally provided that a tribunal of three or more commissioners would fall within the Bill's definition of a Northern Ireland social security commissioner. That would be unnecessarily restrictive in comparison with the position for appeals on comparable matters such as the child trust fund, where only two such commissioners are sufficient. The amendment would mean that only two were required, which would make the provision consistent with the relevant Northern Ireland social security legislation.
	Finally, Lords amendment 8 would increase parliamentary scrutiny of the use of the regulation-making powers provided by the Bill. As hon. Members may know, most of the delegated powers will be subject to the affirmative procedure on their first use, and the negative procedure on subsequent uses. As the Bill stands, there are four exceptions in which every use of the power will be subject to the affirmative procedure: the three delegated powers relating to eligibility for the saving gateway, and the power for regulations to set the match rate. As those delegated powers relate to central features of the gateway, it is right for any changes to be subject to full parliamentary scrutiny.
	The hon. Members for Fareham (Mr. Hoban) and for Taunton (Mr. Browne), along with some in another place, have suggested that parliamentary scrutiny of the delegated powers in the Bill should be strengthened further, and the Bill responds to that. It will make three more regulation-making powers subject to the affirmative order on each use rather than just on the first use: the powers to set the monthly deposit limit, the maturity period, and the number of accounts that people can hold either at the same time or during their lifetimes. As changes in those areas could significantly affect the cost of the saving gateway, we agree that the affirmative procedure is appropriate.
	I hope that Members will welcome the increased parliamentary scrutiny of the powers in the Bill, and, indeed, all the amendments.

Mark Hoban: I still do not quite understand why the Government have decided to specify in the Bill that the maturity period should be no less than 12 months, given that their intention from the outset has been for it to be two years and the Minister has confirmed that the regulation will provide for it to be two years. It will just add to the confusion if one period is specified in primary legislation and a different period is specified in secondary legislation.
	As was pointed out in Committee, one reason the maturity period is important is that it establishes a time during which someone with a saving gateway account will develop a saving culture. It was argued then that a reasonable period of maturity would give people time to develop the practice of putting money aside regularly. During the public evidence sessions that preceded detailed scrutiny of the Bill, Teresa Perchard of Citizens Advice supported a two-year period, and the Economic Secretary agreed when he was leading on the issue. We tabled an amendment to that effect in Committee, but, while accepting the strength of our argument, the then Minister was not very keen for any particular period to be specified in the Bill.
	It is perplexing that the Government have decided to specify a period, and that it is not the period that they want to be specified in secondary legislation. They seem willing to move some way in recognising the Opposition's view, but not willing enough to go further, have the courage of their convictions and specify in the Bill what they believe to be the right period in the context of secondary legislation. I hope that, when she winds up this relatively short debate, the Minister will explain why she considers it appropriate for two different periods to be specified.
	As for Lords amendment 8, we are pleased that the Government have accepted the proposals that we made in Committee. We wanted further use of the regulation-making power to be subject to the affirmative rather than the negative procedure in three areas because of the impact on costs. We felt that changes relating to entitlement and maturity payments needed proper parliamentary scrutiny rather than being rushed through without proper debate in the House. I feel that it is important to protect taxpayers in that regard.
	In the House of Lords, my noble Friend Lady Noakes tabled amendments to extend the affirmative resolution to powers to set the monthly deposit limit, to set the maturity period, and to set the number of accounts that people could hold. They affect the cost of the scheme, and we are pleased that the Government eventually succumbed to pressure in the other place to reflect those changes. The Government are very keen to talk about democratic renewal and the role of the House of Commons, yet it appears that the only amendments they are prepared to accept are those made in the other place. If the Government are genuine in wanting to embrace the views and reflect the opinions of this House, they should accept more amendments tabled in this place when they are tabled, rather than waiting for pressure from the other place to get them to change their mind.

Jeremy Browne: At the risk of sounding somewhat graceless, I, too, wish the Government had gone a little bit further and had done this with a little less reluctance, but having said that, I am pleased that the amendments are in place and that this degree of progress has been made.
	The Bill itself says very little. Anybody who picks up a copy from the Vote Office will not necessarily be very well informed about the nature of the scheme. There are 29 delegated powers in a Bill that has only 32 clauses. I will not give an exhaustive list as I did that in Committee, but the Government are, for example, able to do the following: change the rules governing the issuance of a notice of eligibility; change the rules governing the approved institutional criteria used by HMRC; limit the size of monthly deposits; decide the level of the maturity payment; and impose requirements relating to statements. There is a whole list of criteria that the House is being asked to nod through and to allow the Government to make those changes as they see fit at a later date. The fact is that those changes are substantial to the scheme. We do not have the ability we might wish to influence the details, as they are left out of the Bill.
	Having said that, some progress is clearly better than no progress. Lords amendment 8 asserts the use of the affirmative procedure to decide the maturity period, the definition of an eligible person, and the requirements for opening an account. That is definitely going in the right direction, because without proper discussion of such details in the House we would be asked to approve a shell of a proposal with very little meat inside it.
	It is, however, a shame that we are not being asked to vote for a Bill that has specific measures such as the 50p rate, the two-year maturity period and the 25 a month deposit limit. That is not treating the House as it should be treated. I am enthusiastic about the amendments as they are preferable to what existed before, but the Government could have gone further still.

Sarah McCarthy-Fry: I welcome the fact that the Front-Bench spokesmen of both main Opposition parties appear to welcome the amendments, and I hope they will support them. I think that the only point I need to come back to is the reason the maturity period in the Bill is not less than 12 months and the rest is in regulations. As I have said, we believe that less than 12 months would not represent saving, and that is why we are stating that minimum in the Bill. We want to leave flexibility for regulations to set the minimum period. Leaving that in secondary legislation provides the flexibility to alter that feature of the accounts if, for example, the experience of operating the national scheme suggested a different account length would better achieve the aims of the saving gateway. That is why we want to put that in regulations. Under Lords amendment 8, the maturity period would be subject to the affirmative procedure and to parliamentary scrutiny in this House.
	 Lords amendment 3 agreed to.
	 Lords amendments 4, 5 and 6 agreed to.
	Before Clause 26

Review and report to parliament

Sarah McCarthy-Fry: I beg to move, That this House agrees with Lords amendment 7.
	At various stages during the passage of the Bill, hon. Members and noble Lords made a case for a review of the saving gateway to be carried out in due course after the launch of the accounts. I know that the hon. Member for Fareham (Mr. Hoban) and the hon. Member for Taunton (Mr. Browne) spoke on this matter on Report.
	In response, Ministers in both Houses made clear the importance that they attach to a future review as a way of assessing the success of the saving gateway against the objectives that we have set for it. This amendment would impose a statutory requirement on Her Majesty's Revenue and Customs to commission an independent review of the effect of the saving gateway. It would also set the time scale for the review and its publication, and specify that certain matters will be considered within it. The results and conclusions of the review would be set out in a report that had to be laid before Parliament.
	As hon. Members may be aware, independent evaluations of two saving gateway pilots were carried out by the Personal Finance Research Centre at Bristol university, the Institute for Fiscal Studies and Ipsos MORI, and we envisage following a similar model for this review. It will consider the effect of the scheme against the objectives that we have set for it: to kick-start a saving habit among working age people on lower incomes; and to promote engagement with mainstream financial services. Therefore, the matters addressed in subsections 1(a) to (d) of the proposed new clause directly relate to the development of a saving habit among account holders, account holders' engagement with mainstream financial services and barriers to the opening of saving gateway accounts. In addition, subsection 1(e) would allow for other relevant matters to be considered as part of the review. I commend this amendment to the House.

Mark Hoban: As the Minister has said, we have been calling for a review of the scheme's effectiveness both in this place and in the other place. Let us be clear why such a review is important. We have supported this measure because we believe it is vital to encourage savings and to develop a savings culture among people on lower incomes in this country, and this scheme is aimed at improving that culture. It is, in many respects, a relatively generous schemeit has a 50p matching rateand we want to ensure that the taxpayers' money that is being used to support the scheme is being spent wisely and effectively, and that taxpayers get a return from this scheme through the encouragement of a high level of savings among people on low incomes.
	The Bill was deficient when it first came before us because it did not contain a statutory requirement to conduct a review, and attempts were made both in this place and in the other place to amend that. To an extent, we welcome this amendment, but it contains gaps, two of which, in particular, were demonstrated in the amendment tabled in the other place by my noble Friend Baroness NoakesI shall return to those in a moment.
	I am concerned that the report will be laid before this House only within seven years of
	the coming into force of section 6.
	During the intervening period a significant amount of taxpayers' money will be spent supporting this scheme. I hope that the Government see the seven-year period not as a time scale within which the report will be brought before this House; I hope that they do not wait until the seventh anniversary and then report. The sooner we know how effective the scheme is, the better it will be. We will then be able to consider whether it is a good use of taxpayers' money or whether changes need to be made to the matching payment, the maturity period or the range of eligibility to make it more effective in encouraging the savings culture.
	The first of the two areas omitted from the Government's amendment but addressed in that of my noble Friend relates to take-up. The Government amendment talks about the effect of saving gateway accounts on attitudes to saving, the behavioural impact of the accounts, the involvement of people who use them with the institutions offering the financial services and the barriers to opening the accounts, but it does not mention take-up, whether the take-up rate is adequate and whether that rate should be improved. I understand that an annual report will be made on the number of people who open these accounts, in line with similar statistics produced on the child trust fund, but it would be helpful to have an independent review of the level of take-up and of whether that rate is sufficient to justify the existence of the saving gateway account. The Minister will point out that subsection (e) of the new clause includes the opportunity to add other areas to the review and I hope that she will confirm that she will ensureshould she be in a position to do so in seven years' timethat the take-up rate would be included.
	The second area omitted is financial education. A series of pilots took place as part of the long evaluation of this idea, and they suggested that account opening should happen in conjunction with financial education. We are talking about a group of people who do not necessarily have bank accounts, and they may be sceptical about, or uncomfortable with, dealing with financial institutions. Support may be needed for people opening these accounts.
	If we are to encourage a savings culture, we need to provide incentives to save and accounts that people are happy to save in, and we must provide financial education in parallel with that, to persuade people of the long-term benefits of saving. I am disappointed that the Government have not taken the opportunity to include explicit reference to monitoring the financial education that is provided alongside the opening of the accounts. Perhaps the Minister can say whether financial education will be covered in the independent review and should be taken up under subsection (e).
	We have called for independent reviews of the system, so we will not oppose the amendment, but the Government could have thought more broadly about what the independent review will cover and have been more timely about when it will be laid before Parliament.

Jeremy Browne: My party, for the reasons that have just been outlined by the hon. Member for Fareham (Mr. Hoban), supports this Bill, partly because it encourages self-reliance in people on very low incomes. It will encourage them to save in a way that gives them a greater stake in society and to interact with financial constitutions in a way that, in many cases, they do not feel able to do. Both of those objectives are laudable, and that is why we support the legislation.
	Even though there have been pilot studies, we have had to made educated guesses about how the system will work in practice. We cannot be certain, for example, that the 50p matching rate will not be excessive and, therefore, place too great a burden on the taxpayer in achieving the scheme's objective. On the other hand, it might not be a sufficient inducement for people who will be encouraged to take it up. We do not know whether the two-year period will be successful. We do not know whether the maximum contribution is set at an appropriate leveltoo high or too low. We cannot be certain about the cost or the penetration of the schemethe two are linked. We may wish to increase the inducements, because the people whom the scheme is meant to attract are not sufficiently attracted on the existing terms. Or it may be that the costs prove to be prohibitive and the Government wish to scale back the scheme in the future.
	It is important that the Minister makes a commitment that when this review comes to this House, it will be debated, not just noted. More importantly, the seven-year period is excessive. We will have at least two general elections between now and then. I do not mean to be unkind, but the Minister's predecessor was in office for nine days, so while it is possible that she will be in post in seven years' time, it is not unreasonable to expect some ministerial changes in the Treasury in that time. More importantly, we will have had more than enough time to review the issues that I have raised and for a reasonable opinion to be formed about the workability or otherwise of the legislation. Like the hon. Member for Fareham (Mr. Hoban), I would encourage the Government to think about the lifetime of a Parliament as being a reasonable scale. Four years would be an appropriate amount of time to make a reasonable assessment, would fit into a natural political cycle and would also be sufficient to gauge the success or otherwise of the scheme.
	As I have made the case previously for such a measure, like the hon. Member for Fareham we will not oppose the measure before us although it is not precisely that which we would have introduced had it been left in our hands. On that basis, and with those caveats, we are happy to support Lords amendment 7.

Sarah McCarthy-Fry: I welcome the support from both hon. Gentlemen for the amendment. Let me pick up on a couple of the points that were made. Both hon. Gentlemen made a point about the seven years. We must take into account the fact that any review of the effect of the saving gateways accounts will have to consider account holders' attitudes and behaviour during the two years that the account will last and for a reasonable period afterwards. It would also be desirable for the research sample of participants to include both those people who opened their saving gateway account when the scheme was launched and those who opened theirs later, once the scheme was up and running.
	We also have to bear in mind that within that seven year period, the researchers must have appropriate time to prepare their conclusions and findings and HMRC and HM Treasury must have time to consider those findings carefully and to prepare a report. We must remember that that is the latest time at which a report can be published, not the earliest. If there are benefits to conducting and publishing the review earlier, the new clause provides sufficient flexibility for that to happen.
	The hon. Member for Fareham (Mr. Hoban) asked about take-up. My noble Friend Lord Myners announced in the other place that HMRC would be publishing data on the saving gateway at least annually. That will include data on the number of notices of eligibility issued by HMRC and the number of accounts opened, so take-up rates will be clear. The independent review can also consider that in the context of barriers to the opening of accounts under subsection (1)(d) of the new clause.
	Finally, on financial education, the advice, information and education available to people who are seeking to open an account or whose account is nearing maturity can also be considered by the review when it considers barriers to the opening of accounts and the effects of the scheme on participants' saving behaviour and their involvement with financial institutions. If a more detailed focus on advice and information on the saving gateway is considered appropriate, the new clause has the flexibility to allow that as part of the review. I hope that we will be able to agree to Lords amendment 7.
	 Lords amendment 7 agreed to.
	 Lords amendment 8 agreed to.

Speaker's Statement

Mr. Speaker: Before I call the Minister to make his statement, I regret that this House is the last to hear it. That said, if the statement had been made earlier it would have further constrained the time given to the main business of today. I hope that such circumstances are not repeated in the case of other Departments. In answer to points of order made earlier today, I acknowledge that a written ministerial statement was made today at 7 am, before the Secretary of State's interview was broadcast.

National Express East Coast Franchise

Sadiq Khan: With permission, Mr. Speaker, I wish to repeat a statement made a little earlier by my noble Friend the Secretary of State for Transport about the National Express east coast franchise.
	I will make a statement about rail services on the east coast main line. The House will understand that, because of the imperative for the Government to respond immediately to the trading statement made by National Express when the markets opened this morning, it was also essential for me to make a written ministerial statement earlier.
	For some months now, National Express has been seeking to renegotiate the terms of the franchise agreement to operate services on the east coast main line between London, west Yorkshire, the north-east and Scotland that it signed in 2007. My position has been consistently clearthat the Government do not renegotiate rail franchises. That remains the position today.
	This morning, National Express Group announced that it will not provide the further financial support necessary to ensure that its subsidiary, National Express East Coast, remains solvent. As a consequence, National Express East Coast is no longer able to continue operations to the full term of its franchise, and expects to become insolvent later this year.
	The decision of National Express to break the contract is regrettable and disappointing. All other rail companies are fulfilling their contracts, despite the economic downturn. It is simply unacceptable to reap the benefits of contracts when times are good only to walk away from them when times become more challenging.
	My first and overriding obligation in this situation is to ensure continuity of service to passengers, with no disruption or diminution of service standards. When the Government have had to step in to protect rail services in the past, there has been no such impact on passengers.
	I have therefore established a publicly owned company that will take over this franchise from the point at which National Express East Coast ceases to operate. We will agree an orderly handover with National Express. Until that date, National Express will operate services on the current basis; after that date, the new public company will do so. There will be no interruption of services. Existing operational staffwho continue to provide a good servicewill transfer to the new East Coast Main Line Company, and so will the assets necessary for the continuation of the service. I can assure the travelling public that services will continue without disruption and that all tickets will be honoured. I have today appointed Elaine Holt, until recently managing director of First Capital Connect, a major train operating company, as chief executive designate of the new East Coast Main Line Company.
	The failure of National Express East Coast obviously entails the loss of some future premium payments to which the company was contractually committed. However, while the franchise is under public control, the Government will receive the full revenues of a business that continues to make an operating profit. We will also gain the benefit of any premium payments from the new franchise once it is re-let. This represents a far better deal for the taxpayer than the only alternative course of action, which was to renegotiate the franchise in an exclusive manner with National Express, with no recourse to what is a highly competitive market for rail franchises. The cost of re-letting the franchise will be met from the performance bond of 32 million, to which the company is contractually bound in the event of termination.
	National Express also operates rail services on the East Anglia main line and associated commuter routes. The company has said that it does not intend to default on its obligations in respect of these franchises. Notwithstanding this, the Government believe that we may have grounds to terminate these franchises, and we are exploring all options in the light of the group's statement this morning. In the meantime, we expect National Express to meet its obligations on these franchises in full.
	The Department's procurement procedures test a company's track record and its ability to deliver a franchise and to demonstrate value for money in doing so. It would clearly be reasonable not to invite a company to bid for future franchises in circumstances where it had recently failed to deliver on a previous franchise. A company that had defaulted in the way that National Express now intends would not have pre-qualified for any previous franchises let by the Department. I note that the parent groups of previous franchise failures are no longer in the UK rail business.
	It is the Government's intention to tender for a new east coast franchise operator from the end of 2010. The specification of the new franchise will reflect my concern to secure better passenger services and facilities. In particular, I will be seeking to secure significant further improvements to service quality, including to station security, bike and car parking facilities at stations, bus interchange facilities and train catering. This will ensure a step change improvement for passengers from a new east coast franchise. I intend to consult fully on the new franchise specification, including with passenger groups, parliamentarians and the Scottish Executive.
	I have explained the action that I have taken to ensure that passengers are not affected by the decision of the National Express Group, and have explained the consequences for that group of its decision. Let me also put the events in a wider context. No other train operator has defaulted on its franchise or indicated to us any intention to do so. Nor has any other company sought to renegotiate its franchise. Today's events do not represent the failure of the system, but the failure of one company. The rail franchising system was examined by the National Audit Office last year, and was found to deliver good value for money. The NAO also concluded:
	The Department's arrangements for identifying and managing risks, including handling the failure of a train operator, are well planned and follow good practice.
	It is that good practice that we are following in today's announcement, and I would welcome a further examination by the National Audit Office once the franchise is re-let.
	Rail services at large are steadily improving. Passenger numbers are at their highest levels since the 1940s, punctuality is more than 90 per cent. and overall passenger satisfaction is rising, as was shown in the latest independent national passenger survey, published yesterday. Moreover, the revenue from rail franchises is enabling us to make record investment in upgrading the network and services on it. We saw that as recently as last month, in the award of the new south central franchise for services on lines through south London, Surrey and Sussex. That process was conducted during the recession, yet it yielded a winning franchise bidderthe existing operatorthat is committed to paying a premium of 534 million to the taxpayer over nearly six years. That will be in place of the previous contract, under which the operator was subsidised by the taxpayer. That bodes well for future franchise awards, including for services on the east coast main line.

Theresa Villiers: Twelve hours after the stock exchange, 11 and a half hours after Today programme listeners, and some four hours after the House of Lords, we finally get to hear the news officially. What we have heard is evidence of the incompetence and failure that has characterised the Government's handling of the rail franchising system. Two franchises have collapsed in the space of two and a half years on one of the nation's most important transport corridors, on which millions of people and businesses rely, both in England and Scotland. To borrow a well-known phrase, to lose one east coast franchise might be said to be unfortunate; to lose two looks like carelessness.
	The Secretary of State told their lordships that he hoped that the next franchise would be better than the last. Clearly, for Labour, it is third time lucky, or so it hopes. On the Today programme, the Secretary of State seemed to be saying that National Express East Coast was already in default of its contracts, yet that allegation was not repeated in the written statement, or the statement from the Minister today. Does the Minister stand by the statement made by his boss this morning?
	The Secretary of State has claimed that the Nat Ex holding company is not prepared to stand by its loss-making subsidiary. Does the Minister regret that his Government signed up to a deal that caps the liability of the holding company, and apparently entitles it just to walk away when the going gets tough? Does he accept that the incredibly detailedeven invasive, some would saydue diligence process that the Department for Transport carries out in relation to the credibility of franchise bids and bidders has wholly failed in this case? How much will re-letting the franchise cost? How much did the original franchise process cost? What assessment has the Minister made of alternative solutions to direct Government control, such as getting another operator to run the line under a management contract? How much will the fiasco cost the taxpayer in total? Will the money come out of the control period 4 funding settlement? If not, which part of the DFT budget will be raided to cover it? National Express East Coast was due to pay 1.4 billion over the lifetime of the franchise to help fund CP4. What will be the shortfall on that income? How will the Minister plug the resulting black hole in the funding for CP4?
	Can the Minister tell us whether he expects the Government to be able to exercise the cross-default clauses, either immediately or in the future, and will he guarantee that in that event, the Government will not let services be disrupted? How can the Secretary of State possibly say with credibility today that 15 out of the country's 16 franchises are completely fine, and that it is just a Nat Ex problem, when everyone knows that there is a red-light list of other franchises? Will the Minister come clean and tell us which franchises are on it?
	In conclusion, this debacle shows that Labour learned nothing from the collapse of the Great North Eastern Railway franchise. It has continued to press train operators to make wildly over-optimistic bids. It has wholly failed to get a grip on rising costs in the rail industry and in Network Rail. It has tried to plug the gap by squeezing passengers for higher and higher fares. It cut a deal that capped the liability of holding companies and allows them to walk away from their subsidiaries with impunity. They cannot wash their hands of the problem by saying that Nat Ex got its numbers wrong. The extensive risk assessment by the Department for Transport of the business case underlying the franchise bid has wholly failed, and as a result we have had yet another accidental renationalisation by Labour to add to the lengthening list that began with Network Rail. It is yet another blow to the public finances, and yet another bill for Labour failure has landed with the long-suffering taxpayers, who have already received such punishment at the hands of this increasingly incompetent Government.

Sadiq Khan: I had hoped to have the opportunity to become friends with the Opposition spokesperson before showing the disrespect in which I hold her comments, which lack vigour and do not reflect the facts. I heard Dermot Murnaghan say on Sky that he struggled to understand her arguments, and I know exactly what he means. She is the spokesperson for a party that privatised the railways, that led us to Railtrack [ Interruption. ]

Mr. Speaker: Order. Mr. Jackson, we have heard your commentswe have heard perhaps too many of themand a period of quiet would be helpful.

Sadiq Khan: That led us to the mess that was Railtrack, but the hon. Lady has the audacity to tell us that the private sector is naive, and has been hoodwinked by civil servants to bid higher than it should for a contract to run the east coast main line. The idea that the chief executive who resigned today from National Express and Brian Souter from Stagecoach are patsies who have been hoodwinked by the Department for Transport to overbid for a contract beggars belief, as does making knee-jerk policy on Sky News, rather than looking at the facts.
	I have talked about vigour. Anybody who has taken the time to read the National Audit Office reportnot simply the research prepared by a researcherentitled Letting Rail Franchises 2005-2007, will see that it says of the approach to running rail franchises:
	The Department's arrangements for identifying and managing risks, including handling the failure of a train operator, are well planned and follow good practice.
	Let us look further.  [ Interruption. ] The hon. Member for Wimbledon (Stephen Hammond) chunters from a sedentary position, and says, You've had plenty of practice. Forty-one franchises have been given outtwo have failed, or 4.97 per cent. When I want the hon. Gentleman's advice, I will ask him for it. The NAO, which is the expert, rather than people who go for a cheap soundbite on Sky News, says of value- for-money assessment:
	The Department's approach to rail franchising produces generally well thought through service specifications and generates keen bidding competition.
	I would have hoped, on a day on which a private company making lots of profits seeks to walk away from a franchise, and seeks to walk away from passengers who will receive a less good service unless we step in, that the Opposition party would join us, and stand side by side with us, and say to that private company, This is not good enough. We need a holding company to protect the public and make sure that we have a calm period to reflect on the failures that have occurred, so that when the contract is retendered we have the best possible arrangements not only for passengers but for taxpayers.

Louise Ellman: It is regrettable and unacceptable that the House is indeed the last place to be able to question a major decision. I am pleased, however, about the decision that has been made, and I am pleased that the Secretary of State has adhered to the commitment that he gave the Select Committee on Transport that he would not renegotiate a failed franchise. Will my right hon. Friend assure me that this is indeed a time of change, in which standards for passengers will increase, and in which a private company cannot benefit from the profits of its successor while, at the same time, the public purse picks up the tab for its failure? Can we have a public sector operator to act as a comparator with the private sector franchise operators?

Sadiq Khan: I thank my hon. Friend for her comments. I am pleased that members of the Select Committee are able to be present to contribute to this important statement.
	May I explain to my hon. Friend one of the reasons that the option suggested by Opposition that another operating company should take over in the interim is such a bad idea? It would cost us 12 million to start with, it would be a huge advantage to that company when it comes to applying for the contract later on, and the company would have to be incentivised to make the arrangement work. The Government's course of action provides the best value for the taxpayer.
	My hon. Friend raises an important point about the role of the holding company and who is best placed to run the franchise. I hope that, after a period of reflection, she will speak to the Secretary of State, to me and to others in order to put forward her views. We will speak to parliamentarians, passenger groups, other stakeholder groups and the Scottish Executive, and make sure that we have time for reflection so that we can get the best deal possible.

Norman Baker: I mean no disrespect to the Transport Secretary, the Minister of State or you, Mr. Speaker, but it is not satisfactory that we are having the statement seven and a half hours after we would have had it, had the Secretary of State been a Member of this House, rather than of the House of Lords. We need to find a way of having Secretaries of State from the Lords in the Chamber to make statements. If that is not possible, the Minister of State should be able to make statements ahead of the Secretary of State, at the normal time.
	In respect of the action taken today, first, it was the right decision not to give in to pressure from National Express for further handouts from the public purse. Had the Secretary of State done so, there would have been a queue of train operating companies at his door wanting contracts renegotiated and wanting further handouts from the public. He had no option but to take the position that he did. However, there will be a cost1.4 billion was the premium that was to be paid. There will now be a loss of that premium payment, although a profit will be made from the operation in the private sector. However, there will be a gap. Can the Minister tell us what the gap will be between what National Express would have paid and what will now be recouped from the public purse?
	Secondly, does the Minister agree that if National Express finally defaults, as now looks extremely likely although it has not defaulted yet, that will call into question its competence and commitment as an operator? Under those circumstances, would it not be right for the two other franchises that it holds to be removed from it? After all, why should National Express keep the franchises that it deems to be in its interest and lose the one that it wants to hand back to the public?
	The matter has been under discussion for some time in the Department for Transport. The Department ought to have reached a view on whether it is legal for the two other franchises to be taken back by the Department, or whether they are deemed to be separate entities under the National Express heading. Can the Minister tell us what that legal advice is and whether it is possible, should the Secretary of State wish to do so, for the companies to be taken back into the public sector, or has that not yet been decided? If the Department ends up with all three franchises, can the Minister assure the House that it has enough qualified management to hand to run all three competently?
	Lastly, I turn to the position that the Government have set out with the intention of re-letting the franchise from the end of 2010. I am delighted by the comments of the Chair of the Transport Committee. Instead of retaining the franchise temporarily before re-letting it, what consideration has the Minister given to retaining it for a much longer period as a public interest comparator driven by passenger-oriented targets, instead of the pure financial considerations of the Treasury? Would not such an approach provide a passenger-friendly benchmark that would drive up performance in the other franchise areas? Will he consider that proposal?

Sadiq Khan: I thank the hon. Gentleman for his questions and for looking at the facts before asking them. Much as I am tempted to do so, I will not indulge in discussion of constitutional matters and where is the right place to make a statement and at what time. His comments about us not caving in to the private sector are welcome, and I appreciate his support.
	The hon. Gentleman asked a number of important questions. On cost, we can recover some of the cost from the performance bond worth 32 million. We will be entitled to the premium until National Express walks away, which is its intention, as set out to the stock market today. Other premiums will become available once the contract is re-let. The revenues that we receive will depend on numbers of passengers who use the rail service, the class of passenger and the amount of fare that they pay, so I cannot give specifics, for reasons that the hon. Gentleman will understand.
	The hon. Gentleman raised an important question about what we call cross-defaultthat is, the ability of the Government to take back dirty contracts that the parent company has in subsidiary holding companies. We are exploring all our options, but he will understand if I do not disclose privileged legal advice on the Floor of the House. I appreciateI have read the quotationthat, if one wants a secret kept a secret, one should announce it on the Floor of the House, but he will appreciate that representatives of people whom we may sue may be watching the proceedings or may read  Hansard. What I can say is that we will explore our options. We have tried to ensure that we preserve taxpayers' interests and passengers' interests. That means exploring all the options that are available to us.
	The hon. Gentleman asked about our ability and the holding company's competence, and that is a really important question. We have an excellent designated chief executive taking over, and we have an excellent team that we think will be able to take over the running of the contract as and when National Express decides to walk away.
	On the question whether we want to keep the service in Government hands through a holding company or a permanent holding company, or to tender for a new franchise, let us be clear: one reason we are able to invest record sums in our railway service is the revenues that the franchises bring in and the premiums that they pay; one reason we are able to do the work on High Speed 2, which will lead to a high-speed link from the south to the north, is the system that we have in place; and one reason we are able to electrify lines as fast as we possibly can is the investment that we receive from that structure.
	There are two ways of securing revenue in the rail sector, and the hon. Gentleman knows about them: one is via fare payers, and the other is via taxpayers. We are trying to ensure that we maximise as much inward investment in the rail sector as we can.

Several hon. Members: rose

Mr. Speaker: Order. Twenty three hon. and right hon. Members are seeking to catch my eye, and I am keen to accommodate as many of them as possible, so I am looking to each Back Bencher to ask one brief supplementary question and to the Minister, of course, to offer the House an economical reply.

John McDonnell: This is the second time that the franchise has failed in less than three years in private hands. When we had the same failure with Connex, we brought it into public ownership, it ran for two years as South West Trains, it was the most successful sector of the railway network and it gave us the public sector comparator. Why cannot we keep the franchise in public ownership? Or, why cannot we at least allow the public sector to bid when the tender goes out again?

Sadiq Khan: I have no problems with anybody bidding for the contract when it comes up for tender. The Connex example that my hon. Friend gave is now doing really well. He will have seen the new Javelin train, which displays remarkable speed and reflects remarkable ingenuity on the part of Govia, the company that is running it.

John Redwood: How much money will be put in to the new company as share capital and how much money as working capital?

Sadiq Khan: If the right hon. Gentleman means the holding company, I should say that the intention is for the holding company to take over the day-to-day running of the line until we are able to tender the contract, which we think will be in late 2010.

Mark Lazarowicz: The decision to re-let the franchise will inevitably lead to a lot of uncertainty for the passengers and staff of National Express. Would it not be much better if we decided either to keep the franchise in public ownership or to have it operated by a not-for-profit mutual, so that the customers' interest came first, not the interest of shareholders?

Sadiq Khan: As a number of Members from all parts of the House have said, this is not the first time that a franchise has failed. On both previous occasions, we provided stability to passengers and staff. We have confirmed that operational staff will be transferred to the holding company and that passengers will not suffer. No one will suffer in terms of tickets or the timetable.

John Gummer: The Minister must be aware that my constituents are served by one of the other franchises that National Express owns, and his announcement causes a good deal of concern, therefore, because he has not given any indication of the time that it will take him to make up his mind. Will he please do so as quickly as possible? My constituents have suffered under a nationalised system before; they get a much better service now; and they want to make sure that they keep it.

Sadiq Khan: I undertake to make sure that I keep all Members with an interest informed of developments in relation to exploring all our options. I appreciate the right hon. Gentleman's concerns about the rail service to which he refers, and that is why we will keep all Members updated either via the Floor of the Housethis Houseor via correspondence. I shall make sure that I do that.

Hugh Bayley: I thank the Minister for calling me this morning to update me. There is great concern in York, not only because the headquarters of the company and hundreds of jobs are based there, but because the line is so strategically important to Yorkshire and, indeed, to the whole east of England and Scotland. Given that this is the second franchise to go belly up in three years, will the Minister use the time in which a public company is running the service to pause for thought and consider whether franchisingthe poisoned chalice that we inherited from the Conservativesis an appropriate way to determine the management of a service that is so strategically and economically important?

Sadiq Khan: The consultations that my noble Friend the Secretary of State and I will carry out in the coming period will be interesting. The headquarters to which my hon. Friend referred are in York. I can reassure him that when the holding company takes over the running of the contract later on this year, the headquarters will stay in York.

Adam Afriyie: The Minister complains that a private company has walked away, in the interests of its shareholders, from a contract with the Government. Given that the Government wrote the contract and capped the liability on the private company's holding company, does the Minister accept that they have any responsibility for this mess up?

Sadiq Khan: I direct the hon. Gentleman to the report by the National Audit Office, whose views he may respect far more than he does mine. If he takes the time to read it, he will be looking into the capital arrangements, when the taxpayer subsidises a rail company and when a train operating company pays the taxpayer back.

John Battle: I thank the Minister for his statement and welcome the Government's action. My city of Leeds is highly dependent on a link with London, not least because it is this country's second financial and commercial centre. We have taken a hit from the banking crisis, and without that link to London our city would find it difficult to recover. Will the Minister assure us that there will be no reduction in services, and that in the short term there could also be a review of high prices, to ensure that people have a chance to use the line?

Sadiq Khan: I shall try to respond to those three points in one sentence. There will be no reduction or change in services; we are talking about a prestige line, and that is one of the reasons we are investing in high-speed linksnot only to Manchester, but to Leeds, the west midlands and Scotland.

Malcolm Bruce: Passengers from Aberdeen will very much regret this second debacle, and they always regretted the loss of GNER anyway. What can the Minister do in this interim time to ensure that we get competitive fares rather than the extra charges that National Express imposed? We need to compete with the airlines, because it is now cheaper to fly than to use the railways.

Sadiq Khan: The right hon. Gentleman raises a really important issue. There are two issues, relating to regulated and unregulated fares. He will be aware that the train operating companies have agreed to increase their fares only by RPI plus 1 per cent. The pundits tell us that the RPI should be lower this July, when the figures are taken, so in January we expect regulated fares to reduce. However, we cannot escape the fact that unregulated fares can go up. We advise passengers who go for the cheap airline tickets also to look for cheap train tickets, which can be obtained if they are booked far enough in advance.

Colin Challen: This time around, the public ownership option will not be brushed aside. In the period of calm reflection that we will now have, will the Minister undertake an urgent review of all the other franchises? He has said that none of them is about to default, but can we have a review so that we can understand how healthy they are?

Sadiq Khan: I reassure my hon. Friend that we are in regular contact with all the train operating franchises. We know their state of health; part of the franchise agreement is that they have to keep us up to date about their position. I reassure my hon. Friend that no other franchise is in a position such as that of National Express.

Anne McIntosh: This is a sad day for those who work on and use the east coast main line. Does the Minister accept that the model that GNER used for the bid, and National Express repeated, was based on a false premisethe number of premium fares that it was assumed would be paid at a time of credit crunch? Does he also accept that the franchise model will work only if the risk is passed to the private sector and does not remain with the taxpayer?

Sadiq Khan: I do not accept that the former chief executive of National Express, who resigned today, and who was previously head of the Strategic Rail Authority, is naive and does not understand how the market works or how to predict the future. He made a bid with open eyes, and was successful; those who were unsuccessful were not far behind the successful bid, either.

Jeremy Corbyn: I thank the Minister for his statement, and welcome what the Government have done today. However, surely this proves that only the public sector can be relied on to maintain and run the railway system. Can he therefore give us the good news that the line will not be handed back to the private sector but will remain a publicly owned, publicly run and publicly accountable railway, so that we will not have such debacles in future?

Sadiq Khan: I hear what my hon. Friend says, but I do not agree with him. Fifteen of the 16 franchises are doing a good job; more passengers are using our railways than at any time since the 1940s; punctuality is above 92 per cent.; a survey published yesterday shows a high satisfaction rate among customers; and we have more investment in our railways than ever before.

Alan Beith: Does the Minister not recognise that the bidding process has produced two defaulting operators on this line? If he looks for the level of premiums that he has had from it in the past he will drive away not only passengers, because of high fares, but future bidders for the franchise.

Sadiq Khan: There would be evidence for what the right hon. Gentleman says if the National Audit Office agreed with him, but it does not. As the Secretary of State said earlier, we welcome the NAO's looking at the whole process of franchising once we have re-let it. He can be reassured that the process is not at fault: the company is at fault, and it is the company that is walking away from the contract.

David Anderson: May I suggest to the Minister that the only thing that has happened in the past two years is that costs have gone up and services have gone down? The only people to come out of this with any real respect are the staff, who have tried to hold the service together. Will he ensure that when he talks to people, he asks the staff and their unions what they want to see? They will say that they want public railways in this country, and they will be right.

Sadiq Khan: I thank my hon. Friend for what he says about the staff. The railways employ more than 2,000 staffvery good staff who do an invaluable job in ensuring that the trains run well. I can assure him that we will include the staff when we speak to stakeholders to ensure that we get the best deal possible, not only for passengers and taxpayers but for staff.

Robert Goodwill: National Express got no brownie points at all when it recently introduced a 2.50 each-way seat reservation charge. That discriminates against elderly people who cannot run the risk of standing on the train and families who wish to travel together. Will he prevail on the new interim operating company to reduce this fare rise made by stealth?

Sadiq Khan: The hon. Gentleman raises a very good point. That is one of the reasons Labour Members believe in regulating. When we re-tender the contract, we will ensure that such things do not happen, instead of allowing the market to dictate what happens on trains.

Hilary Armstrong: I congratulate my right hon. Friend and our noble Friend the Secretary of State on their statements. Can he reassure us that the new trains that are due for the east coast line are still on track, given the decisions announced today?

Sadiq Khan: We will ensure that we keep to the targets we have set and the agreements we have reached. That includes not only the quality of service that passengers receive but investment for the future.

Bernard Jenkin: Why have the Government effectively served notice on National Express with regard to the East Anglia franchise and told the country, I note that the parent groups of previous franchise failures are no longer in the UK rail business, when it is obvious that the Government do not have the power to terminate that franchise, and are going to get locked into a legal dispute? Having created maximum uncertainty for passengers on the East Anglia franchise, will the Government be able to deliver the coup de grce to National Express or will there be a long period of protracted dispute and uncertainty for passengers?

Sadiq Khan: We have said both in this House and in the other House that we are going to explore all our options. It is a statement of fact that the two other parent companiesSea Containers and Connexno longer run trains in the UK.

Gavin Strang: As an Edinburgh-based regular user of the east coast main line, may I ask my right hon. Friend whether he agrees that it is a great asset, which is why National Express signed up to put in 1.4 billion to operate it for 10 years? We should welcome the Government's intervention, but may I put it to him that the key thing is to sustain this service? Will he do all he can to maintain it and go forward and build on it for the future? We have had a statement today, but we need more statements in future, because we are all concerned not only about the lines that we use regularlymany of us use this line regularly, and we have to maintain the quality of service, frequency and everything elsebut the railway network generally.

Sadiq Khan: My right hon. Friend, who is clearly an expert in this area, understands and confirms what we all knowthat this is a prestige line. That is why there was huge interest in it when it was last up for tender. It is why, as those who read newspapers will know, takeover attempts were reported in the press in relation to the company. I am sure that there will be a lot of interest when the contract comes up for re-tender towards the end of next year. I add that we recently had the experience of the South Central line, in which there was huge interest and for which we got 534 million over a six-year period.

Michael Moore: In the 1,500 square miles of my constituency there is not a single railway station, which makes the one at Berwick-upon-Tweed, in my right hon. Friend's constituency, of great strategic importance to my constituents. Will the Minister give a specific pledge that under Government control and the new contract, services to and from Berwick-upon-Tweed will not be altered unless they are improved?

Sadiq Khan: The hon. Gentleman has given one example of the sort of thing that we will consider when the contract next goes to tender. We will see whether we can include such things as a new station. We need to ensure that we take on board the concerns and issues raised by parliamentarians and stakeholders to get the best deal possible for passengers.

Stewart Jackson: In view of the comments that have been made throughout the day about the Government's changing attitude to the viability of National Express East Coast, and the position taken on the two other companies, which my hon. Friend the Member for North Essex (Mr. Jenkin) alluded to, what specific legal advice has the Minister or the Secretary of State received on the advisability of proceeding to remove National Express from the other two franchises? What analysis has been made of the financial ramifications of those actions?

Sadiq Khan: I am slightly confused, because I have answered that question three times. We are going to explore all the options, legal and otherwise, to ensure that we get the best deal for the taxpayer, for passengers and for staff.

John Mason: Can the Minister assure us that he will be working closely with Scottish Government Ministers both on the refranchising and on any changes in the interim period?

Sadiq Khan: I confirm that we will, and we already are. That is very important.

Greg Mulholland: I welcome the substance of the announcement, considering that National Express has, frankly, run down the service. However, the way in which it has been made has been chaos tinged with farce, with press release politics, developments being heard on the Today programme and later National Express going on the radio to say that this was actually not happening. There has been confusion in Leeds and other areas. May I ask the Minister, first, to say why the GNER-Virgin bid was not accepted at the time, as it seemed a better one? Secondly, will he conduct an urgent review of

Mr. Speaker: Order. I think one question will do.  [Interruption.] Order. I gently say to the hon. Gentleman that I implored Members to ask one question, and I think that that will do. The Minister has got the gist.

Sadiq Khan: Just in case the hon. Gentleman is in danger of putting out a press release about this, let me make it clear that we got wind that National Express was going to make a report to the stock marketa pre-close statementtoday. We liaised with your office, Mr. Speaker, and that of the Lord Speaker, to ensure that we gave due courtesy to both Chambers. Before my noble Friend the Secretary of State did any mediathere were no press releaseshe issued a written ministerial statement at 7 am, to which you have alluded, Mr. Speaker. To show the House respect and courtesy, I repeated it in my name, also at 7 am. To suggest that we put out press releases is disingenuous, and I hope that on reflection the hon. Gentleman will withdraw that suggestion.

Stewart Jackson: On a point of order, Mr. Speaker. You made a point earlier, in answer to a question asked by my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), about the transmission of an interview with Lord Adonis, the Secretary of State for Transport. It was about whether the transcript of that interview showed that commercial information or a policy statement had been given about today's decision by the Government. Have you had a chance to review that transcript, and are you in a position to report back to the House the results of your review?

Bernard Jenkin: Further to that point of order, Mr. Speaker

Mr. Speaker: Order. With great respect, before the hon. Gentleman makes his point, I say gently to the hon. Member for Peterborough (Mr. Jackson) that I have of course had the opportunity to review the position. I thought that that was perhaps apparent from what I said to the House earlier, and I hoped that I had made the position abundantly clear.

Bernard Jenkin: Further to that point of order, Mr. Speaker. The House is grateful for the statement that you made before the Minister's statement, but it raises a new question. I realise that it is an extremely difficult matter for you to tackle and I greatly appreciate your efforts in that regard. However, if it is now possible for Ministers to issue a written statement to the House at 7 o'clock in the morning, which then allows them to go on the Today programme before Members of Parliamenthere or in the other placehave had a chance to cross-examine them, we are back to square one. I do not know what the solution is, but I hope that you will consider the matter carefully.

Mr. Speaker: First, I say to the hon. Gentleman that I am not complaining about any extreme difficulty. It does not seem to me to be quite as difficult as he suggests. Secondly, I thought that I had made it clear that there was a response to a commercial situation. Thirdly, it is fair to say to the hon. Gentleman and the House that it is not reasonable to be expected to be drawn into a continuing debate about those matters when one has already made the position clear. The position may not be liked by all hon. Members, but I thought that I had made my intention clear at lunchtimeto go away and consider the situation, which I duly did. I thought that I made the position even clearer by what I said before the Minister made his statement. I hope that, with that, the matter may be laid to rest.

Anne McIntosh: Further to that point of order, Mr. Speaker. I was here at a quarter to 8 this morning, and would have loved to read the written statement. Where could I have found it at that time? As you know, statements often find their way to the Press Gallery before they reach the Library. Normally the House of Commons Library receives statements at 9 o'clock at the earliest. If I wanted to respond to constituents' queries at a quarter to 8, where could I have found the statement?

Mr. Speaker: I am not at all sure that the hon. Lady would have found it easy to do that. That is a reasonable point, into which I will look further. I think that I made it clear that the circumstances that arose today should be either relatively rare or, better still, exceptional. I would not expect such circumstances to repeat themselves on a regular basis. I thought that I had already said that. Nevertheless, in so far as the hon. Lady has legitimately challenged me, I am happy to repeat the point.

Business without Debate

DELEGATED LEGISLATION

Mr. Speaker: With the leave of the House, we shall take motions 6 to 12 together.
	 Motion made, and Question put forthwith (Standing Order No. 118(6)),

Constitutional Law

That the draft Scottish Parliamentary Pensions Act 2009 (Consequential Modifications) Order 2009, which was laid before this House on 3 June, be approved.

Building Societies

That the draft Amendments to Law (Resolution of Dunfermline Building Society) (No. 2) Order 2009, which was laid before this House on 4 June, be approved.

Banks and Banking

That the draft Dunfermline Building Society Compensation Scheme, Resolution Fund and Third Party Compensation Order 2009, which was laid before this House on 15 June, be approved.

Terms and Conditions of Employment

That the draft National Minimum Wage Regulations 1999 (Amendment) Regulations 2009, which were laid before this House on 9 June, be approved.

Data Protection

That the draft Data Protection (Processing of Sensitive Personal Data) Order 2009, which was laid before this House on 10 June, be approved.

Rehabilitation of Offenders

That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2009, which was laid before this House on 10 June, be approved.

European Communities

That the draft European Communities (Definition of Treaties) (Cariforum Economic Partnership Agreement) Order 2009, which was laid before this House on 1 June, be approved. (David Wright.)
	 Question agreed to.

BUSINESS OF THE HOUSE

Ordered,
	That, notwithstanding the practice of the House as to the intervals between stages of Bills brought in upon Ways and Means Resolutions, more than one stage of the Finance Bill may be taken at any sitting of the House. (David Wright.)

PETITION
	  
	Hospital Parking Charges (Cheshire)

Mike Hall: Mid Cheshire Hospitals NHS Foundation Trust has introduced car parking charges at the Victoria infirmary, Northwich. After the first 20 minutes, patients and visitors now have to pay 3 for parking. The Victoria infirmary is the only public facility in Northwich that charges for car parking, and I congratulate Gina Bebbington and the  Northwich Guardian on their campaign against those charges and on collecting a petition of 7,108 names, calling for car parking charges at the Victoria infirmary, Northwich to be scrapped.
	The petition states:
	To the House of Commons
	The Petition of residents of Northwich, and others,
	Declares that the car parking charges of the Mid Cheshire Hospitals NHS Foundation Trust at Victoria Infirmary, Northwich are excessive and represent a charge on people accessing National Health Services.
	The Petitioners therefore request that the House of Commons urges the Government to take whatever action possible to require the Mid Cheshire Hospitals NHS Foundation Trust to remove the unfair car parking charges at Victoria Infirmary, Northwich.
	And the Petitioners remain, etc.
	[P000387]

Bank Lending Policies

Motion made, and Question proposed, That this House do now adjourn. (David Wright.)

Tom Clarke: May I express my thanks to you, Mr. Speaker, for allowing me to raise the subject of the debate and take the opportunity to congratulate you on your election to your distinguished post?
	Many of my constituents will be pleased that I am taking the opportunity to highlight what history will surely judge to be a financial injustice perpetrated by the power of some banks against individual consumers. I have countless examples in my office of constituent cases where banks have imposed unfair charges on customers whose accounts may have been only a few pounds short for a brief period.
	Let me briefly sketch the background. The Office of Fair Trading launched its investigation into bank charges in April 2007. It examined the fairness of charging terms for unarranged overdrafts on personal current accounts under the Unfair Terms in Consumer Contracts Regulations 1999. In July 2007, the OFT entered into a written litigation agreement with seven banks, one building society and the Financial Services Authority, with a view to bringing a test case to ensure an orderly and efficient process for the resolution of the legal issues.
	At that time, the FSA issued what is known as a waiver. Essentially, the FSA, as the regulator, was waiving the rules that specify time limits for dealing with any complaint about the level, fairness or lawfulness of unauthorised overdraft charges. The managing director of retail markets at the FSA said:
	We have granted the waiver to help facilitate this test case. We believe it is not in the interests of all consumers for complaints to continue to be dealt with in the current inconsistent way.
	Before the test case agreement was reached and the waiver was invoked, we were in the scandalous position in 2007 where banks had paid out a staggering 784 million to approximately 378,000 customers. Rather than defend their untenable position in the courts, banks paid out when challenged. We can take it as read that some of the banks would not pay out a single penny if they did not need to.
	It is important to establish my credibility on this subject by stating that I am not swimming in a tide of populist hostility towards the banks. As a matter of proof, I have in my possession a letter that I wrote to the OFT on 15 August 2007 and another one that I wrote to the FSA on 20 August 2007, along with other representations. In both letters, I questioned the tactics being deployed and the wisdom of both organisations in dealing with the vexed issue of bank charges.
	With your permission, Mr. Speaker, I will now present a few of the questions that I asked the OFT then. Where is the fairness for consumers who will now have to wait until the High Court decision before being reimbursed? What financial protection measures are in place to safeguard consumers, as that court action means that the banks will be able to hold on to consumers' money even longer? Among the many questions that I asked the FSA were these. Was there any consultation with an appropriate parliamentary Committee before proceeding to grant a waiver? Why was a decision taken to allow banks that waiver while still allowing the contested charges to remain in place? Can the FSA confirm that the waiver will not affect charges being taken from account holders whose income comprises social security benefits? Finally, what protection is available to consumers who are exempt from arrestment in terms of section 187 of the Social Security Administration Act 1992 and section 45 of the Tax Credits Act 2002?
	Since then, the banks have been levying excessive lending charges of up to and including 38 on customers who exceed their limit. That is probably 10 times the actual cost, which may be less than 3, and the practice has caused untold financial hardship to many people in my constituency and, I have no doubt, those in other constituencies.

Nia Griffith: Does my right hon. Friend agree that the banks' attitude to people such as my constituent, Alun Richards, who has been developing Tycroes business park very successfully, but now finds the banks determined to impose unrealistic conditions on himin spite of complimenting him on his business planis very damaging to the local economy and is not helping the local area out of the recession in any way? Does he agree that as the Government have given money to these banks, we should see it coming through to help viable businesses to thrive as we all want them to in our areas and help us out of the recession?

Tom Clarke: I very much welcome my hon. Friend's remarks, and I assure her that in my constituency, many small businesses in particular take the same view.
	Meanwhile, there is no moratorium preventing the banks from continuing to levy the charges I have mentioned, which I find completely unfair and also unnecessary. I have been very critical of the banks on this subject, as is evident on my website and my annual reports. My criticisms have also been covered in excellent local newspapers such as the  Airdrie  Coatbridge Advertiser, the  Kirkintilloch Herald and the  Bellshill Speaker. These newspapers take a very keen interest in my activities on the issue of bank lending charges because they know how cruel, punitive and grossly unfair they are to our local people.
	I am on record as saying, back in 2007, that this legal battle with banks
	has all the potential to become stuck in a judicial quagmire where Banks appear to have deep pockets to fund legal fees in an attempt to delay justice to hard pressed consumers.
	I note that the personal finance campaigner, Martin Lewis, agrees with me and is quoted as saying:
	The banks have used lawyers as a calculated weapon deliberately to delay claims. The High Court and the Court of Appeal have both ruled against the banks and the Court of Appeal did not want the banks to be able to appeal to the Law Lords.
	The law is very clear that bank lending charges are governed by unfair regulations; yet, he said that
	the regulator has put on hold consumers' ability to reclaim charges.
	Peter Vicary-Smith, the chief executive of  Which? said:
	It's disappointing that nearly two years since this saga began, little has changed for the millions of consumers being hit with these charges.
	My concern at the time that this legal process was initiated by the OFT was that it could drag on endlesslycertainly beyond what is reasonableand end up with the Law Lords.

Mark Durkan: Will the right hon. Gentleman give way?

Tom Clarke: I will but I hope my hon. Friend will be brief because I am under a time limit.

Mark Durkan: I thank the right hon. Gentleman for giving way. He has clearly reflected the very significant changes taking place in banking over the past couple of years, but one thing that has not changed is how this House deals with the issue of banking. Given the considerable degree of intervention and public ownership in the sector and despite the Trojan work of the Treasury Select Committee, this House surely needs to come up with some better device for dealing with banks in the current situation; perhaps having a specific Select Committee on banking would put manners on some of these proceedings.

Tom Clarke: My hon. Friend has made an excellent point, and I am very glad that he has put his views on the record.
	It seems to me eminently sensible to take appropriate action and prevent more customers from being overcharged. No other company would get away with imposing massive penalty charges, and the banking institutions must be pressurised into stopping this malpractice, as it is crippling the personal finances of so many hard-working people.
	I have no intention of trying to influence the outcome of the Law Lords' test case, but let me spell out the consequences for the banks if they lose. It will mean repaying millions of customers billions of pounds because the ruling must be retrospective; it will go back at least six years, and perhaps more. The Court of Appeal confirmed on 26 February 2009 the OFT's view that unarranged overdraft charging terms can be assessed for fairness. The court found that those terms were not part of the core or essential bargain between consumers and their banks, and that therefore consumers had protection under the Unfair Terms in Consumer Contracts Regulations 1999. That is the judgment against which the banks are appealing.
	For the past two years, the banks have enjoyed a bank-charges bonanza in that they need not deal with complaints. The banks have benefited; the losers are consumers and my constituents. I want to present the case for thoroughly decent people who, as a result of circumstances beyond their control, find themselves in a very difficult financial position.
	One woman in Coatbridge has three children, is a single parent, and worked hard until recently she unfortunately lost her job. Within weeks she was hit by three 35 bank charges. She depends on state benefits, and however much she tries to obtain a remedy from the bank, it is likely that she will be banging her head against a brick wall. Another of my constituents was recently widowed. She experienced a difficult time as she made the adjustment. She lives alone, surviving on a meagre state pension. Last month, she inadvertently became overdrawn by a few pounds when a direct debitfor house insurancewas returned unpaid.
	On 13 May, the woman received a penalty of 35 for having the direct debit returned, and a further charge for an unplanned borrowing facility of 25 was added to her account. The bank requested that she return her account to credit, which she did by paying 72 on 21 May. After that financially punitive experience, she was advised by a friend to open an account with another bank, and she arranged to have her pension paid into the new account. However, the bank that she was leaving applied a further 60 in charges to her account. On 1 June, the bank refused to close that account until she paid the additional 60. That is indefensible; it is quite disgraceful. However, such cases of hardshipand there are many moreare all too familiar to Members, and to organisations that are active in helping people to deal with bank charges.
	This is how financial hardship is defined by the Financial Services Authority:
	A complaint is considered when his or her income is insufficient to cover reasonable living expenses and meet financial commitments as they become due.
	When my constituents contact their local bank, the person at the other end is simply not interested. Banks may tell civil servants that that is not true, and advisers may try to persuade Ministers that it is not true, but I am implacably on the side of my constituents who are suffering hardship, and I believe their experience to be only too true. However, I accept that it is not enough to flag up the problem, so I want to recommend a solution.
	I should like every bank to set up a special dedicated hotline so that customers in hardship can be dealt with immediately. In the present economic climate, although the Government are taking special measures to help people into employment or with their mortgages, banks too have a duty to provide a more responsive service for people suffering real hardship, particularly while the waiver is in place. I intend, with the support of other Members, to pursue the issue with the Financial Services Authority. However, I invite my colleagues in the Government to accept that the status quo is unacceptable, and to establish a better system for dealing with complaints about unfair bank lending charges for people suffering hardship.
	The banks have dug themselves into a deep hole. So far, nearly 1 million people have claimed for the return of their unauthorised overdraft charges, but their cases are on hold. If the banks lose, the legal arguments should proceed to a key stage: a case to determine whether the charges were fair or not. It could cost the banks billions of pounds� so we can be in no doubt about their motivation to continue with the status quo.
	On 26 February, an appeal by eight banks against a High Court ruling that a regulator could investigate the fairness of overdraft charges was thrown out. Sir Anthony Clarke, Master of the Rolls, dismissed the banks' appeal, and told them that they should allow the Office of Fair Trading to decide whether their charges were fair or not. Four High Court judges had now reached the same conclusion on the issue of the OFT's jurisdiction.
	We have unanimously concluded that the application should be refused,
	said Sir Anthony. He added:
	The issues should now be resolved by an OFT assessment of fairness.
	He refused the banks leave to appeal further, but they decided any way to apply directly to the Law Lords for permission to appeal. Marc Gander of the Consumer Action Group said the banks' decision to appeal further was amazing, and he added that, They know no shame. He also said:
	You'd have thought they would choose to come quietly and join the rest of societyit is astonishingly arrogant of these people.
	It is time the Government stepped in and said enough is enough. After all, when the banks went bust they were rescued by public moneysubstantial public money. The Government have rightly ploughed countless billions into saving the banks from collapse and helping to protect savers. The Government not only have the moral authority but also the financial leverage to leave the banks in no doubt that when the Law Lords announce their decision this must end.
	I shall conclude by saying in all candour that hon. Members of all parties have much work to do if we are to regain the trust of the electorate following months of negative publicity. This evening, I hope that we will wish to analyse the bank lending charges scandal, and we will find that this punishes the poor in a manner that should make us all feel ashamed. It is time that we remedied this blatant unfairness.

Sarah McCarthy-Fry: I congratulate my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) on securing the debate and bringing these important matters to our attention. I recognise the difficulties that can be caused by unexpected bank charges, especially for the most vulnerable and those on low incomes who are least able to bear them. The examples my right hon. Friend cited are characteristic of similar cases in my constituency, and we all have sympathy for those affected.
	Members will appreciate that the question of bank charges is linked to wider issues about the banking system and the regulatory regime. I do not want to pre-empt any statements that may be made in the Treasury's forthcoming paper on regulatory reform, but I will say something in general terms about what the Government want from the banking and regulatory systems in the future, before I come on to bank charges specifically, and the treatment of customers who may suffer hardship.
	There has been a fundamental breakdown of trust in the global financial system. All of usGovernments, regulators and the industry itselfneed to work together to rebuild that trust. That process will take time. There are no instant remedies or overnight solutions; it starts with an acceptance that mistakes have been made in the past, and a willingness to learn the lessons. Although I recognise the need to reform the financial system, we must also be careful to retain what works. We need to walk a fine line: there must be sufficient regulation to safeguard the public interest, but not so much that we stem the flow of credit and stifle the very innovation that can benefit us all.
	Banking is, by its nature, about taking risks. The task is to manage that risk and ensure that the public interest is safeguarded. There is an unwritten compact between the banks and the public. This relationship is important, and it is important that we get it right. The answer for today's problems lies partly in the deregulation of global banking in the 1980s, which was followed by huge financial innovation in the 1990s. This, combined with low interest rates around the worldparticularly in the last 10 yearsset the scene for one of the biggest expansions, and one of the biggest crashes, of global credit in history.
	I do not believe the answer is to divide investment banking from core deposit taking and lending. This creates a narrow versus broad banks divide. Some have suggested limiting the scale and complexity of banks; others have proposed a simple utility bank model. I will say more about this in a moment, but let me first come on to the narrower question of bank charges.
	The Government are taking action on bank charges. The Office of Fair Trading is pursuing its test case against a group of banks about charges for unauthorised overdrafts and items that are returned unpaid. As my right hon. Friend pointed out, in April 2008 the High Court ruled that certain terms in the contract governing personal current accounts could be assessed for fairness under the unfair terms in consumer contracts regulations. That was upheld by the Appeal Court on 26 February 2009, and a further appeal was heard recently by the House of Lords between 22 and 24 Junea ruling is expected in the autumn. Subject to the House of Lords decision, the OFT has written to the banks with a preliminary view on the fairness of the charges and embarked on a data-gathering exercise to provide the material on which to base a final decision.
	On 3 April, the OFT announced that it would streamline its investigation by focusing on the terms of three banks in particular. The aim is to progress the case in the shortest and most efficient way possible. The OFT believes that the terms of the three selected banks provide the best representative selection of all the banks' unarranged overdraft charging terms, and therefore the outcome of this more focused investigation will be relevant to the assessment of other banks' terms. The investigation will concentrate initially on the charging terms of Lloyds TSB, HSBC and Clydesdale, and the OFT has written to all the banks under investigation to outline that decision.
	It should not be assumed that the OFT is more or less likely to find those banks' terms unfair. The investigation into the other banks' terms is merely on hold and the OFT has stressed that no bank's terms have been given a clean bill of health. The OFT expects to reach final conclusions on fairness later this year, subject to any further legal challenges. Once the application of the regulations is clarified, customers will be able to pursue their complaints against the banks if the outcome of the case is in their favour.
	I am concerned, however, that confidence in the retail banks cannot be restored while large numbers of complaints are on hold pending a resolution of the test case. One way to determine the fairness of the bank charges is for litigation to continue until it reaches a conclusion, which may take some years. An alternative negotiated solution could be in the interests of customers, the banks and the regulators. As we have heard, until there is a resolution the Financial Services Authority and the courts have decided that complaints about bank charges should be put on hold. The FSA has granted banks a waiver from its rules about complaints handling in respect of charges, subject to a number of conditions. One is that complaints from customers suffering hardship will continue to be heard. The banking code commits the banks to identify and resolve situations involving a customer experiencing financial difficulty. The waiver is a matter for the independent regulator and it is subject to a number of conditions. For example, the FSA may revoke it if the duration of the test case is likely to cause undue risk to consumers or if no material progress is made in the test case without good reason.
	Looking ahead, I believe there should be a new compact between the people and the banks. Put simply, people need to have confidence that when they open an account they will be treated fairly, their savings will be safe and they will not be overcharged. Opening an account should not expose customers to the risk that they will suffer detriment. It is a compact built on responsibility, fairness and choice, and it involves shared responsibility between the banks, the regulators, and bank customers themselves; fairness, whereby banks and financial institutions operate to benefit consumers, businesses and the wider economy, not just their shareholders or their employees; and choice, in properly regulated banking markets that are founded on competition, openness and efficiency.
	Banks provide an essential service, but they are commercial organisations. Governments should intervene in the market only as a last resort, as intervention may trigger unwelcome and unexpected consequences, but Governments must none the less act to protect people when excessive charges or risk taking threatens them. Banks, and in particular their boards, need to recognise that their duty to shareholders is best fulfilled by acting in the interests of their customers and in the interests of not only some but all their employees. Banks' boards need to focus not on short-term profits but on long-term wealth creation, which is best served by meeting the service needs of all their customers.
	In order to regain the trust of the public, we need change that extends beyond the boardroom and beyond cleaning up the banks' balance sheets; we also need to reform the culture of banks. Regulation, like governance, must be designed in a way that recognises the importance of the financial sector to the economy as a whole. It should reinforce good behaviour and act as a check against bad practicesthat should be self-evident. We have already consolidated seven different regulatory agencies into onethat was a significant stepbut more is needed. For example, a new conduct of business regime, covering all retail banking services within the FSA's remit, will take effect from 1 November 2009. It will introduce a new, principles-based approach to regulation and detailed conduct rules for pre and post-sale requirements affecting retail deposit taking. I also look forward to the outcome of the work the OFT has been doing with stakeholders to address the concerns identified in its market study of the operation of the market for personal current accounts.

Mark Durkan: Will the Exchequer Secretary give way?

Sarah McCarthy-Fry: The convention is that it is only the hon. Member who secured the debate who intervenes, but I will give way.

Mark Durkan: I am grateful to the Exchequer Secretary for giving way to me. Will the FSA also focus on the bespoke banking market in Northern Ireland, which is very different from the banking market elsewhere? Scotland also has different conditions. Will the FSA take those into account?

Sarah McCarthy-Fry: I cannot answer that question off the top of my head, but I will undertake to write to the hon. Gentleman with that information, with special reference to Northern Ireland.
	I hope that the OFT's market study, together with the resolution of the bank charges test case, will open the way to the introduction of transparent price structures and simpler mechanisms for switching from one provider to another.
	I am grateful to my right hon. Friend for raising these issues. We must all work together to ensure that we learn the lessons. It will take time, but if we clean up and reform the banks, change their culture, and strengthen regulation, people can begin to regain their trust in them. That includes ensuring that the regulatory framework protects customers from excessive charges. We also need to look at where improvements can be made to banks' corporate governance and business conduct, and ensure that charges are simple, proportionate and transparent, and we must do this in a way that supports the flow of credit to consumers and business.
	 Question put and agreed to.
	 House adjourned.

Deferred Divisions

Environmental Protection

That the draft Environmental Permitting (England and Wales) (Amendment) Regulations 2009, which were laid before this House on 13 May, be approved:
	 The House divided: Ayes 269, Noes 196.

Question accordingly agreed to.

Adjournment (summer)

That this House, at its rising on Tuesday 21 July 2009, do adjourn till Monday 12 October 2009.
	 The House divided: Ayes 254, Noes 212.

Question accordingly agreed to.

Notices of questions etc. during september 2009

That the days appointed for the tabling and answering of written questions and for written ministerial statements under Section Order No. 22B (Notices of questions etc. during September) shall be as follows:
	 Tabling days
	Wednesday 2, Monday 7 and Wednesday 9 September 2009.
	 Answering days
	Wednesday 9, Monday 14 and Wednesday 16 September 2009.
	 The House divided: Ayes 465, Noes 3.

Question accordingly agreed to.